'This could be catastrophic' — local industry leaders sound alarm on tariffs

Wednesday, July 18, 2018

DAVE BATTAGELLO, WINDSOR STAR

 

https://windsorstar.com/news/local-news/mold-makers-auto-parts-corporate-leaders-sound-alarm-on-tariffs

 

Nearly 250 business owners and corporate executives in the local tool and die, mould-making and autoparts sectors came looking for answers Wednesday on how best to survive changing U.S. rules on tariffs that threaten their industries.

The luncheon at the Ciociaro Club, hosted by the Canadian Association of Mold Makers, featured industry leaders sounding the alarm on how steel tariffs called for by U.S. President Donald Trump have already hurt business. Threatened tariffs in the auto sector would be “disastrous” for thousands of Windsor and Essex County workers, they said.

Bobby Tremblay, regional sales manager for Finkl Steel, which supplies companies in the local area, said there hasn’t been a big impact yet but that inventories of certain grades of steel will be running low in the next few weeks.

“If (tariffs) go long-term — and especially if this goes into (auto) parts making — this will be completely disastrous. Businesses will lose market share, there will be job losses and shops will close.”

On June 1, the U.S imposed 25 per cent tariffs on steel and 10 per cent tariffs on aluminum from Canada and Mexico. The Canadian government retaliated with its own tariffs on July 1 against U.S. steel and many other products.

A hearing in Washington on Thursday, under the same authority that led to the tariffs on steel and aluminum, will address merits of a 25-per-cent tariff on automobiles and parts.

Windsor and Essex County is ground zero in dealing with the impact due to shared cross-border business with companies in numerous states across the U.S. There are 11,000 tool industry workers across Canada, with 6,000 of those in the Windsor area.

Local business owners said they are doing their best to steer through the new rules to adapt to the U.S. tariffs. Those attempts so far have focused on adjusting content of steel and aluminum being purchased for use so as to avoid the new U.S. tariffs as much as possible.

The federal government has also offered a $2-billion aid package, but that doesn’t go very far given the large number of companies hurting, said local MP Tracey Ramsey (NDP—Essex).

“The $2 billion is a drop in the bucket when spread across the country,” she said. “We have a great need in this region. We are getting calls every day and our office is trying to get answers and figure out what the plan is going forward.

“The issues are serious. The auto folks are very nervous. People are trying to come together and figure out where we should be going to ensure long-term success of their sector.”

Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, encouraged local business owners at Tuesday’s meeting to get aggressive on the tariff issue, launch court challenges and speak out — or suffer the consequences.

“What’s going to happen to a plastics shop that employs 200 people in Windsor and gets materials from Ohio?” he asked. “The impact in Ohio will mirror the impact here. People in the (U.S.) need to know that story. We need to activate and create congressional influence.

“If you don’t speak up now, then when? Tell legislators that a 25 per cent tariff is not just a slowdown,” Volpe said. “If you are making parts here and buying raw materials in the U.S., business for that U.S. customer halts,” he said, adding it could lead to business shutdowns on the American side.

Volpe said if auto tariffs become a reality, up to seven or eight U.S. states will face “immediate recession” and that story needs to be emphasized across the border.

The Windsor-Essex Economic Development Corporation is doing what it can to help local companies steer through the tariff issues and changing trade rules, said CEO Stephen MacKenzie.

“We are building the airplane as we are flying it,” he said. “The regulations and tariffs announced by both countries have many implications. We are trying to understand the interpretations so we can get proper information to the companies.”

The development corporation has been identifying available relief programs, plus lobbying the federal government on behalf of the local companies as issues and needs are identified, MacKenzie said.

“This is all about the steel and aluminum tariffs so far,” he said. “If tariffs come to pass on autos and parts this could be catastrophic.”