The Impact of Tariffs on an Aluminum Foil Manufacturing Company
As the tension of tariffs grows between Canada and the United States, one company faces the harsh reality of the repercussions. Wohler Canada Inc., located in Mississauga, specializes in producing pie tins, takeout containers, and various items made from aluminum foil. The company’s plant manager, Sam Thang, reveals the strain the tariffs have placed on their business operations.
- Subheading: Direct Impact on Exports
- 20% of Wohler Canada Inc.’s finished products are exported to the United States.
- Thang expresses his concern that this portion of their business may be lost due to the tariffs.
- Subheading: Indirect Effects on Canadian Customers
- Canadian customers who utilize Wohler’s products for their pies and ready-made meals face increased costs.
- The impact on Canadian businesses indirectly affects Wohler’s sales in the long run.
Thang notes that quantifying the indirect impact on Canadian customers is challenging. He speculates that in the worst-case scenario, their business in Canada could decrease by 40%.
Additionally, the raw materials used by Wohler to produce these food containers are imported from China. The Canadian government imposed a 25% surtax on aluminum from China last October. This decision was based on concerns of “pervasive subsidization and other non-market policies.” Despite the imposed tax, Wohler received a temporary relief until the end of the year.
The growing financial strain caused by tariffs only adds to the company’s concerns. Thang emphasizes the stress felt by the Wohler team as they navigate through these challenging times.
In response to U.S. tariffs on steel and aluminum, the Canadian government announced 25% tariffs on U.S. goods worth $29.8 billion as a retaliatory measure. This tariff affects all countries, including Canada, imposing 25% levies on imports of these materials into the United States. Canada’s dollar-for-dollar tariffs are set to take effect promptly.
As Wohler Canada Inc. faces the impact of tariffs on its business, the unfolding situation underlines the far-reaching consequences of trade disputes on companies, customers, and economies at large. The need for swift resolutions and stable trade relations remains crucial for businesses like Wohler to thrive in the global market.
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