One industry leader said British Columbia manufacturers are “very concerned” about the effect of U.S. tariffs and are scrambling to ensure their products are compliant with the Canada-U.S.-Mexico free trade agreement.
On Aug. 1, U.S. President Donald Trump introduced 35 per cent tariffs on Canadian goods not covered under CUSMA.
Trump’s previously announced tariffs included a 50 per cent levy on steel and aluminum, 50 per cent on copper, and 25 per cent on auto parts.
In turn, Canada has imposed counter-tariffs, including 25 per cent tariffs on a broad range of imports from the U.S.
Prime Minister Mark Carney was in Kelowna on Tuesday, for an announcement about softwood lumber, where he noted CUSMA has protected 85 per cent of Canada-U.S. trade from tariffs.
Andrew Wynn-Williams, Divisional Vice-President for B.C. with Canadian Manufacturers and Exporters, said the trade war is massively increasing the administrative burden for many businesses, in addition to the financial costs.
For many B.C. manufacturers that are part of the highly integrated U.S. supply chain, it’s not an easy process to find a new market.
“You not only need to find a new client that is suited to your skill set, but you probably have to make a capital investment to retool to meet a different overseas client,” said Wynn-Williams.
He said the U.S. government’s scrapping of de minimus exemptions on duty for shipments under US$800 will also hit a lot of small manufacturers hard.
Premier David Eby had repeatedly said B.C. is disproportionately impacted by counter-tariffs. B.C. Stats has estimated that the counter-tariffs put in place in March apply to roughly 20 per cent of the value B.C.’s total imported goods from the U.S.
Wynn-Williams said Canadian manufacturing was already far behind compared to other countries due to a lack of capital investment, so the tariffs are compounding issues the sector already faces.
CME’s survey of Canadian manufacturers in June found 44 per cent had delayed or cancelled investment plans, and close to 40 per cent had implemented a hiring freezes or layoffs.
He said the CME supports moves to knock down interprovincial trade barriers and speed up approvals for major projects, but it wants to see more support for direct investment from the province.
Wynn-Williams’ message for Canadian policy makers is “negotiate, negotiate, negotiate.”
“Although it would be possibly more satisfying to just punch the bully in the nose and tell him to get lost, we’re not really in a position to do that,” he said.
The prime minister held a closed-door meeting with Premier David Eby on Sunday. Carney said Tuesday it was a “long discussion,” but wasn’t specific about what they talked about.
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