Since 1988, Lanex Manufacturing in Windsor, Ontario, has produced various metal components for vehicles, including door strikers and tailpipe hangers. However, concerns about the future of the plant have intensified as President-elect Donald J. Trump prepares to assume office, with threats of a 25 percent tariff on goods exported from Canada to the United States potentially jeopardizing the automotive industry.
Bruce Lane, president of Lanex, expressed the prevailing anxiety in the boardroom, stating, “If Windsor lost its automotive business, Windsor would not survive.” The city, located just across the Detroit River from Detroit, has long been aware of the deep economic ties between Canada and the United States, particularly in the automotive sector.
Prime Minister Justin Trudeau acknowledged the vulnerability of Windsor's workforce due to its reliance on U.S. trade, emphasizing that proposed tariffs would have widespread repercussions across both countries. Windsor's economy is significantly intertwined with the automotive industry, with 90 percent of Canadian-made vehicles exported to the U.S.
The Gordie Howe International Bridge and the Ambassador Bridge are vital trade routes, facilitating approximately $300 million in cross-border trade daily. Canadian officials are taking Trump’s tariff threats seriously, leading industry leaders like Lane and George Papp, CEO of Papp Plastics, to brace for potential economic impacts.
Papp indicated that U.S. automakers would likely pass tariff costs onto suppliers like him, raising concerns about the sustainability of local businesses. Flavio Volpe, president of the Automotive Parts Manufacturer’s Association, warned that many members operate on thin profit margins, making tariffs potentially disastrous.
Since the 1965 Canada-U.S. automotive agreement, the industries have become increasingly integrated. At Lanex, small metal parts are produced under significant pressure and sent to various locations, illustrating the cross-border nature of production.
Windsor’s economy faces additional challenges, as many auto-parts manufacturers have yet to recover from the pandemic-induced downturn. The city, with a population of approximately 484,000, is home to a major Stellantis factory and is witnessing investments in electric vehicle production.
Despite these investments, Stellantis is experiencing difficulties transitioning to electric vehicles amid competition from China. Local union president James Stewart expressed doubts that tariffs would be fatal for Stellantis but acknowledged that they could lead to severe repercussions for the local economy.
Trump's initial rationale for tariffs included securing borders against undocumented migration, but he has also suggested more drastic measures regarding Canada’s economic relationship with the U.S. The Canadian government is expected to outline its response to potential tariffs soon.
While Canada’s smaller economy limits its ability to retaliate effectively against U.S. tariffs, targeted levies could harm specific states. Meanwhile, at Lanex, Lane noted a new manufacturing project unrelated to automobiles that could serve as a buffer against tariffs.
Papp, despite opposing tariffs, expressed support for Trump’s broader economic agenda, emphasizing the enduring alliance between Canada and the United States. “You can’t separate our countries,” he remarked, highlighting the deep-rooted economic connections.