Amidst the looming threat of tariffs from U.S. president-elect Donald Trump, Canadian businesses and workers are bracing themselves for potential devastation, as highlighted in a recent survey conducted by the lobby group Canadian Manufacturers and Exporters. The findings of the report, released on Thursday, reveal the alarming reality that nearly nine in 10 manufacturers face significant or very severe impacts if the U.S. enacts tariffs on Canadian imports. This precarious situation calls for an urgent and co-ordinated response from governments to safeguard manufacturing businesses, workers, and families, as emphasized by Dennis Darby, the chief executive of CME, in a statement.
Key Points From the Survey:
- Nearly nine in 10 manufacturers would face significant or very severe impacts if the U.S. imposes tariffs on Canadian imports.
- Failure to address this issue promptly could have devastating consequences for the Canadian economy.
- Trump’s threat to impose a 25 per cent tariff on imports from Canada and Mexico poses a risk to nearly $600 billion in exports, with two-thirds comprising manufactured goods.
In response to these escalating concerns, the federal government recently announced $1.3 billion in spending on border security and the immigration system as part of its fall economic statement, aiming to address Trump’s anxieties. However, the U.S. president-elect continues to express apprehensions about Canadian trade, suggesting financial imbalances and raising questions about the existing trade relationship between the two countries.
Manufacturers in Canada are already taking preemptive measures to mitigate tariff risks ahead of the inauguration, with findings from the CME poll revealing the following actions:
- 30 per cent are accelerating shipments to the U.S.
- 30 per cent have postponed planned investments.
- 22 per cent have implemented hiring freezes.
- 48 per cent are considering a hiring freeze or layoffs if tariffs are implemented.
- 46 per cent are contemplating postponing or canceling planned capital investments.
- 49 per cent are mulling over shifting some production to the U.S.
The survey, which involved 330 manufacturers and was conducted between Dec. 11 and 18, sheds light on the proactive steps being taken by businesses to navigate the uncertain trade landscape. With approximately 40 per cent of the surveyed companies having fewer than 100 employees, another 40 per cent having between 100 and 499, and the remainder having more than 500 staff, the implications of potential tariffs are far-reaching.
In conclusion, the need for a strategic and collaborative approach to address the looming tariff threats cannot be overstated. It is imperative for governments and businesses to work together to protect the interests of the manufacturing sector and the broader economy. As the situation continues to evolve, proactive measures and innovative solutions will be essential to weathering the storm of uncertainty and safeguarding the future of Canadian businesses and workers.
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