Since 1988, the massive presses at Lanex Manufacturing, outside Windsor, Ontario, have cut door strikers, folding seat latches, exhaust pipe brackets, frame braces and other pieces of prosaic metal found in vehicles ranging from Corvettes to Honda Minivans.
But these days, concerns about the future permeate the factory as President-elect Donald J. Trump prepares to enter the White House. He threatened to impose 25 percent tariffs on all goods exported from Canada to the United States. In Windsor, it would devastate its lifeblood: automobiles and everything that makes them up.
“Everybody’s waiting for the next shoe to drop,” said Bruce Lane, president of Lanex, in his conference room, whose walls were made of painted concrete blocks. “If Windsor lost its automotive business, Windsor would not survive. »
Few Canadian cities are as fully aware of the integration of the two countries’ economies as Windsor. The city is located directly across the Detroit River from Detroit, and Canada’s maple leaf flag is often flown there alongside the Stars and Stripes. And no industry has been intertwined across the border as long as automobile manufacturing.
“These workers here in Windsor are more exposed to trade with the United States than anyone else,” Prime Minister Justin Trudeau said at a steel mill during a recent visit to the city.
Mr. Trump, he added, “is proposing tariffs that would not only hurt people here in Windsor, but people across the country and even in the United States.”
Windsor’s two major landmarks are shared with Detroit: the $5.7 billion Gordie Howe International Bridge, scheduled to open this year, and the 96-year-old Ambassador Bridge, which carries about $300 million in cross-border trade every day. Of Canada’s $440 billion in annual exports to the United States, only oil and gas generate a larger quantity than cars, trucks and auto parts.
But while Canadian officials are taking Mr. Trump at his word that he will make good on his threat of tariffs, Mr. Lane and others in the auto industry are already bracing for the potential fallout.
George Papp is the managing director of Papp Plastics, which is headquartered near the imposing new suspension bridge. He said his U.S. customers, mainly automakers, would simply invoke the terms of contracts he has with them and deduct the cost of customs duties from the amount they pay him.
“Who’s going to take the hit?” » said Mr. Papp. “Me, and people like me, and businesses like mine. »
Flavio Volpe, president of the Automotive Parts Manufacturers Association, a Canadian trade group, estimated that most of his members had single-digit profit margins and that the tariffs threatened by Mr. Trump would be ruinous.
The intertwining of the two countries’ auto industries was cemented in 1965 when Canada and the United States reached an agreement that effectively eliminated the border for the industry. Today, 90 percent of cars and trucks made in Canada are shipped to the United States, primarily by train.
At Lanex, small metal parts that few motorists will ever see are forged under more than 600 tons of pressure by the company’s presses. Their travels illustrate how intertwined the two countries’ auto industries have become.
As a small supplier, Mr Lane does not deal directly with car manufacturers, but sells his products through larger parts manufacturers. Seat latch hooks made by Lanex for Honda minivans are sent to a factory elsewhere in Ontario, where they are fitted with other parts, then shipped to an assembly line in Alabama that is owned by Honda, a Japanese company .
Mr. Lane’s factory sent parts to Michigan to be heat treated, brought them back to Windsor for further machining, then sold them to an American company.
“Windsor is used to crossing the border from one end to the other,” Lane said. “It’s like getting out of bed in the morning.”
The upheaval caused by possible tariffs comes at an already difficult time for the Canadian auto sector. Many auto parts makers have yet to see their business return to pre-coronavirus pandemic levels due to lagging car sales. In 2020, Lanex had about 60 employees working on two shifts, but it now has about two dozen employees working on a single shift.
Concern is particularly acute in Windsor, which has a metropolitan population of about 484,000. Besides the freight trucks that cross the Ambassador Bridge, the city’s most obvious automotive symbol is a giant Stellantis factory that produces Chrysler Pacifica minivans as well as Dodge Charger muscle cars.
A city within a city, the European company Stellantis employs 4,500 workers in its factory. Helped by billions of dollars in Canadian subsidies, it is building a joint venture battery factory with South Korean company LG in Windsor and recently spent C$1.89 billion (about $1.3 billion) to retool its assembly plant to manufacture electric vehicles alongside gasoline. – those powered.
But like many automakers, Stellantis is now in poor shape as it struggles with the transition to electric vehicles and competition from China.
James Stewart, president of the local union that represents Stellantis workers in Windsor, said he didn’t think a significant tariff would necessarily deal a fatal blow to Stellantis’ Windsor operations, given the company’s investment. business.
But because much of Windsor’s economic well-being is intertwined with trade with the United States, Mr. Stewart said, the tariffs would deal a major blow, including business closures, layoffs and reductions of production.
“We are a suburb of Detroit; we always felt that way,” he said, adding that Windsor seemed to be “under attack and for no reason.”
Mr. Trump initially characterized the tariffs as a way to get Canada and Mexico to better secure their borders to stem the flow of undocumented migrants.
But he also considered making Canada the 51st state, pointing out that the United States was heavily invested in Canada’s military defense and threatened to use economic force to annex it. He also spoke about what he described as the U.S. “subsidizing” of Canada, an apparent reference to the U.S. trade deficit with Canada, largely due to oil and gas imports.
The Trudeau government is expected to detail what retaliatory measures it would take against U.S. tariffs on Monday, the day Mr. Trump is scheduled to take office.
But Canada’s relatively small economy makes it difficult for the country to inflict substantial economic harm on the United States, even though levies on specific products could harm individual states. Retaliatory tariffs would also drive up prices in Canada.
Back at the Lanex factory, Mr. Lane said that, by sheer coincidence, the company had embarked on a “secret” manufacturing project unrelated to automobiles and which, unexpectedly, had become potential coverage against customs duties. He declined to provide details to avoid tipping off competitors.
Mr. Papp, the plastics company owner, said that while he opposed the tariffs, which would hurt his business, he was a fan of Mr. Trump and understood why the president-elect had supported that the tariffs were necessary to help rebuild the industry. in the United States.
Whatever happens, Papp said, Canada and the United States will always remain steadfast allies.
“You cannot separate our countries,” he said. “They’re bolted together.”
