Implications of tariffs extending beyond initial estimates, according to supply chain specialist, are evidently substantial.
In a move that could have far-reaching consequences, the Oval Office has announced a tariff increase on Canadian imports, including autos and auto parts, from 25% to 35%. This escalation, implemented under the International Emergency Economic Powers Act, aims to pressure Canada's economy but also creates volatility affecting job security in trade-dependent sectors such as automotive manufacturing [1][3].
Experts and union leaders have confirmed that these tariffs are causing layoffs and hurting workers on both sides of the border. The Canadian auto sector, already seeing a decline in North American production share, faces the risk of accelerating job losses and operational challenges due to these punitive tariffs [1][2]. The interconnected nature of Canadian and U.S. auto industries means that such trade tensions negatively impact employment and industrial stability in Canada’s auto manufacturing base [2].
While Fraser Johnson, a professor at Ivey Business School and Chair of the Leenders Supply Chain Management Association, has not been directly quoted on the 35% tariff increase, the general consensus reflects that higher tariffs drive up costs, reduce competitiveness, and threaten jobs within Canada’s auto sector. This analysis is consistent with academic assessments by supply chain and business management experts like those at Ivey Business School.
Johnson does not express any optimism about the economic impact of the tariff increase. Instead, he believes that the current economic impact is less dramatic than the headline suggests. He also emphasizes that there is no upside to retaliation against tariffs [4]. Johnson supports Prime Minister Mark Carney's approach of not retaliating against tariffs and does not agree with Premier Doug Ford's calls for retaliation [5].
It's worth noting that the Canada-U.S.-Mexico Agreement (CUSMA) helps keep American tariffs at bay for more than 90% of goods [6]. However, the sectoral tariffs on autos and auto parts, a significant part of Canada's exports, continue to pose a significant challenge.
The indirect effects of these sectoral tariffs are more significant because they create business uncertainty. This uncertainty stifles innovation by making businesses hesitant to make investments, hire new people, and invest in research and development [7]. Johnson states that businesses are hesitant to invest due to uncertainty caused by tariffs, and they are less likely to ask for funds to do so [8].
Johnson's comments suggest that the current economic climate is causing concern for job security, both in Canada and the U.S. He highlights that the auto sector in Canada employs over 90,000 people in supply-side roles, in addition to the 30,000 people assembling vehicles [9]. The communities like Windsor and Southern Ontario, which are heavily dependent on the auto industry, are particularly feeling the pain of these sectoral tariffs [10].
In conclusion, the 35% tariff increase on Canadian auto imports is causing disruption in the supply chain and increasing uncertainty for the industry. Experts warn that these tariffs could lead to job losses and operational challenges in the Canadian auto sector. While Fraser Johnson, a professor at Ivey Business School, has not been directly quoted on the matter, his views align with the general consensus that higher tariffs drive up costs, reduce competitiveness, and threaten jobs within Canada’s auto sector.
- The tariff increase on Canadian imports, particularly on automotive goods, could potentially impact the economy, with experts and union leaders confirming that these tariffs are causing layoffs and hurting workers on both sides of the border.
- Fraser Johnson, a professor at Ivey Business School, believes that the current economic impact of the tariff increase is less dramatic than the headline suggests, but also emphasizes that there is no upside to retaliation against tariffs.
- Higher tariffs drive up costs, reduce competitiveness, and threaten jobs within Canada’s auto sector, which is a significant part of Canada’s exports. This analysis is consistent with academic assessments by supply chain and business management experts.
- The indirect effects of these sectoral tariffs are more significant, as they create business uncertainty, stifle innovation, and make businesses hesitant to make investments, hire new people, and invest in research and development.
- The auto sector in Canada employs over 90,000 people in supply-side roles, in addition to the 30,000 people assembling vehicles, and communities heavily dependent on the auto industry, such as Windsor and Southern Ontario, are particularly feeling the pain of these sectoral tariffs.
