Manufacturers, exporters in N.B. prepare for worst with Trump tariffs
Threat couldn’t come at a worse time, says Canada-U.S. relations expert
Canadian manufacturers are left worrying as the inauguration of U.S. president-elect Donald Trump looms in less than two weeks.
With a threat of 25-per-cent tariffs on Canadian and Mexican imports to the U.S., the country is also preoccupied with a prime minister set to step down and a prorogued parliament.
Ron Marcolin, New Brunswick and Prince Edward Island divisional vice-president for Canadian Manufacturers & Exporters, said businesses around the country have been surveyed recently about their level of concern.
"I think it's very fair to say that manufacturers in Canada, and certainly in New Brunswick, they're battening down the hatches," Marcolin said, in an interview with CBC Radio's Shift.
He added that many companies are examining all aspects of their business to understand what might be affected, and some have implemented hiring freezes as they wait to see if the tariffs come through.
"They're saying, you know, it's uncertain times. It's a risk. We don't want to staff-up immediately," he said.
And some businesses are more connected to the U.S. than others.
"If they have multiple plants and they happen to have a plant in the United States, they're looking to shift production to the U.S. so they can ... not even be involved in the whole ... mess."
Businesses depend on predictability and being able to have a sense of what profits and costs will be, Marcolin said.
"So it's all about predictability and this certainly throws a wrench into it."
He said tariffs would not only be devastating to New Brunswick, but to the whole country. When Trump previously implemented tariffs, in 2018 and 2020, they were specific, while this threat is overarching.
"Anything you buy, you know, at your favourite Walmart, Costco, you name it, products across the board in Canada will be affected," Marcolin said.
"So we are attempting, with the help of our sister organization in the United States, to lobby the people around Trump and his entourage to have a better understanding of what the implications are."
Upwards of 80 per cent of products made in New Brunswick are for export, predominantly to the U.S., and many manufacturers are still struggling to get past COVID and inflation issues, he said.
"This is just going to add to the angst," and on top of that are the political challenges facing Canada at the same time.
"We obviously know who Donald Trump is. But on the Canadian side, we don't know, obviously, who our next prime minister will be."
Timing couldn't be worse, expert says
Xavier Delgado, a senior program associate with the Canada Institute in Washington, D.C., agrees.
"Meanwhile, up in Ottawa, we have a prime minister who, on Jan. 6, effectively made himself a lame duck, has purged Parliament and set what is effectively going to be the start of an election," Delgado said.
The first 100 days of a president's administration are often most effective because they set their highest priorities and have the most support, he added.
"The first two-thirds of those hundred days are going to be spent with a prorogued Parliament and a lame-duck prime minister, and the last third is going to be spent in an election."
Canada will be without a clear mandate to handle U.S. relations until April 30, at the earliest, Delgado said.
"That's why I think Canada's vulnerable to the U.S. ambitions."
Delgado said the only person who knows if these tariffs are going to go into effect, or if they're just a negotiating tactic, is Trump himself.
"I'm going to be very closely watching in the coming weeks how the Liberal Party candidates put forward their vision on Canada-U.S. relations," he said.
"But I'll also be watching to see how the Conservative Party and the NDP and other political leaders across Canada respond."
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With files from Shift and Clare MacKenzie