On Friday morning outside City Hall in Windsor, Ontario, fans wearing Detroit Tigers attire gathered at a bus stop to cross the river for the team’s home opener, indicating that not all American traditions were being boycotted.
However, the week brought concerning news for Windsor, as President Trump announced a series of global tariffs on Wednesday, including a significant 25 percent tariff on cars assembled outside the United States. The immediate impact was felt when Stellantis, the city's largest employer, informed Unifor, the union representing its workers, that approximately 3,600 union members would be laid off for two weeks while the company assessed its response to the new tariffs.
Industry executives and analysts had anticipated that the tariffs would lead to plant shutdowns, though they expected these consequences to unfold over a longer timeline. The existing contract between Unifor and Stellantis is expected to cushion the financial blow for union assembly workers, but employees at auto parts plants, which will likely also face closures or layoffs, do not have similar income protection.
Stellantis, along with other automakers in Canada such as Toyota, Honda, General Motors, and Ford, must navigate the implications of these tariffs. Under the free trade agreement with Canada and Mexico, tariffs will be adjusted based on the American content of each vehicle, prompting manufacturers to reconsider their sourcing strategies for parts. The process of determining American content for auto parts is anticipated to be more complex than for finished vehicles.
Windsor, a key city in Canada’s automotive industry, may be confronting its most significant crisis since 2008, when Chrysler Canada required government assistance to avoid financial failure.
The mayor of Windsor, Drew Dilkens, discussed the situation, noting that Stellantis is currently evaluating its inventory and costs to determine the pricing and demand for vehicles moving forward. He expressed concern that rising vehicle prices would lead to decreased demand, necessitating fewer workers to produce fewer vehicles, resulting in widespread layoffs across the auto sector.
Despite concerns about the future of assembly plants and parts manufacturing in Canada, Dilkens remains optimistic about the feasibility of maintaining local production due to the exchange rate and the presence of numerous parts suppliers. However, he warned that sourcing parts from China might become more appealing, despite the tariffs.
Dilkens acknowledged the challenges posed by the U.S. tariffs and emphasized the risks associated with Canada’s reliance on the U.S. as a trading partner. He indicated that this situation might prompt Canadian businesses to explore alternative markets to mitigate risks.
During the ongoing election campaign, the Trump tariffs have been a focal point, with various political leaders proposing measures to address the economic impact. Mark Carney suggested the creation of a government-owned affordable housing development agency, while Conservative leader Pierre Poilievre proposed tax incentives for Canadian investments. New Democratic leader Jagmeet Singh advocated for reviving “victory bonds” to support the economy amid the trade conflict.