U.S. tariffs could lead to shutting down of auto plants within a week, auto parts group head says
The president of the Automotive Parts Manufacturers’ Association is warning that assembly plants across Ontario and throughout the U.S. could shut down within a week if tariffs on Canadian and Mexican goods become a reality.
Flavio Volpe made the comment during an interview with CP24 Breakfast on Monday. The interview was conducted prior to a press conference where U.S. President Donald Trump confirmed that the tariffs would come into effect on Tuesday and said that there was no longer any room for negotiation.
“If those tariffs come in on cars what we learned in 2020 when the pandemic hit and in 2022 when the Ambassador Bridge was closed is you can’t make the cars without all the parts,” Volpe said. “So, if you are making six or seven per cent [profit] and your customer says you have to pay a 25 per cent surtax on what you are shipping, you are not going to ship. And if you don’t ship it, there isn’t an alternative. [Manufacturers] can’t go buy a crank shaft or car seats at a Walmart. So, the industry, like it did in those first two incidents, will close within a week and that includes Ontario and Michigan all the way down to Kentucky, Alabama and Texas.”
Trump had previously threatened to put 25 per cent tariffs on Canadian-made goods sold in the U.S. The tariffs were set to be imposed last month, but were delayed. Now, they will be put into place on March 4.
Consumers and politicians are trying to insulate themselves from the potential of tariffs, but they could still be left reeling from the long-term effects.
“When the Ambassador Bridge closed in Canada it meant that 100,000 or so people were on temporary layoff,” Volpe warned. “We have been prepared for this from day one. We thought it was going to happen on Jan. 31. So we are prepared in so much as you can be prepared for a punch that you know is coming to your face.”
Canada’s automotive industry accounts for over $19 billion of Canada’s GDP and has an annual revenue of $100 million. The industry employs about 128,000 people directly, and most of those are located in Ontario, according to the Canadian Vehicle Manufacturers’ Association.
While Trump said on Monday that the tariffs will go ahead, Volpe told CP24 Breakfast prior to that announcement that he remained hopeful the threat of retaliation might cause the U.S. president to change his mind.
“He stepped back from the brink last time,” he said.
This article was first reported by CTV News
