U.S. tariffs imposed by the Trump administration on Canada this year have significantly contributed to rising unemployment, adversely affecting the country's automotive industry and its future prospects.
Canada and the U.S. have long been close allies with deeply intertwined industries and economies.
However, the U.S. tariffs this year, followed by the counter tariffs from Canada, have created unprecedented tensions between the two historic allies.
Bilateral trade between the two countries is worth a combined 1.3 trillion dollars. A good portion of that is due to the auto industry. On average, more than 7,000 trucks cross the Ambassador Bridge, between Windsor in Canada and Detroit in the U.S., each day.
But traffic between the two countries has slowed in recent months, largely down to a trade war marked by a flurry of tariffs and counter tariffs.
Jahn Engineering, located just outside Windsor, specializes in crafting tools and dies—essential machines used in the production of auto parts.
"So with the tariffs, the OEMs, that's the guys who make the cars. They have cost uncertainty. They're not sure what their costs are. So because they have cost uncertainty, they're not sure where they're going to put their manufacturing facilities. They're not sure which cars they're going to build. So what they do right now, because of the costs uncertainty, they just stop all the new tooling programs. They're not all stopped, but the lion share have stopped. Since the turn of the year, we have seen companies lay off as much as 50 percent of their staff. No viable company can survive or move forward with cost uncertainty. You have to know what your costs are to be able to survive," said Louis Jahn, president of Jahn Engineering.
Companies like Jahn Engineering are also concerned about the long-term impacts continued tariff uncertainty might have on various industry sectors.
That includes worries that potential job cuts could push many skilled workers out of those industries, never to return.
"When this whole tariff situation is settled, what's probably going to happen now is we already had a skills gap. We already had a skills vacuum. It's going to get worse, because a lot of people are going to leave the industry and not come back. And the reason they're leaving the industry is they have to make a living. They have to stay alive. They have to eat," Jahn said.
The U.S. is Canada's largest trading partner. Almost two-thirds of the country's exports are sent to the U.S.
"Canada and the U.S. have worked seamlessly through the trade agreements. It's beneficial for both sides. Both sides win. The Americans leverage Canadian resources. Canadians leverage U.S. resources. It's a win-win situation," said Jahn.
If the tariffs are imposed for any length of time, experts predict the impact on Canada's economy will be significant.
U.S. tariffs trigger job losses, disrupt Canada's industrial outlook
