Jon Azzopardi, president of Laval, is preparing to absorb millions of dollars in extra costs to preserve Canadian jobs and U.S. customer relationships should the worst outcome of tariffs come to pass.Dax Melmer/The Globe and Mail
The machinery runs 24/7 at Laval, a manufacturer of equipment and auto parts. But the din offers little comfort to company president Jonathon Azzopardi.
Roughly 85 per cent of Laval’s products are exported to the United States and the threat of a bilateral trade war still looms large. Although U.S. President Donald Trump paused his plan to impose punitive tariffs earlier this week, Mr. Azzopardi is preparing to absorb millions of dollars in extra costs to preserve Canadian jobs and U.S. customer relationships should the worst come to pass.
Also weighing on him is the knowledge that any future impediment at the Canada-U.S. border would harm every family in Ontario’s Windsor-Essex region – whether their incomes are tied to manufacturing, farming or any other sector.
“It’s like a funeral. That’s what it feels like,” Mr. Azzopardi said in an interview Wednesday afternoon.
“It’s so sombre right now that nobody knows what to say or do. There aren’t really words that describe when somebody dies. Well, in this case, something that’s so important to a community is about to die or potentially could die.”
Windsor is one of Canada’s most trade-dependent cities. Each day, some 8,000 trucks carrying an estimated $400-million worth of goods flow across the city’s land border with Detroit – amounting to one-third of bilateral trade.
As the clock ticks down on Mr. Trump’s 30-day reprieve, tens of thousands of jobs remain in jeopardy. That lingering uncertainty about the risk of swift and severe economic fallout continues to rattle residents of this border city.
Canada presses on with trade diversification strategy in face of Trump’s threats
But Windsorites aren’t just angry about business, they feel betrayed on a personal level, too. For decades, their daily lives have seamlessly spanned both sides of the Canada-U.S. border. Detroit is their second home. As a result, the current trade tensions risk cleaving important social, cultural and family ties.
“We have people here who are scared out of their minds with respect to what would happen to their jobs and their families,” Windsor Mayor Drew Dilkens said. “Twenty-five per cent is a catastrophic tariff for us. It’s not a minor annoyance – it is catastrophic.”
Windsor’s economic development strategy, Windsor Works, is predicated on the city’s integration with Detroit. What’s more, some 6,000 nurses, doctors, engineers and other local professionals cross the border each day to work in Detroit.
Additionally, Canada’s first EV battery factory is being built in Windsor. Improvements are also taking place at the city’s airport, while the new Gordie Howe International Bridge is expected to open to traffic later this year.
Commercial trucks drive on the Ambassador Bridge between Windsor, Ont., and Detroit, on Jan. 18. Some 6,000 nurses, doctors, engineers and other local professionals cross the border from Windsor each day to work in Detroit.Rebecca Cook/Reuters
Mr. Dilkens, who likens the U.S. tariff threat to an anvil hanging over the heads of Windsorites, isn’t waiting on the resolution of Mr. Trump’s whims. He recently launched the Border Mayors Alliance to explore solutions with his Canadian peers. He has separately spoken to his counterparts in Detroit and other U.S. cities.
“They understand that a 25-per-cent tariff would be quite consequential to their economies, but none of them really believe that it’s going to be real. They believe that it is a negotiating tactic by the President,” Mr. Dilkens said.
“I take it with a much different perspective because I don’t have the luxury of believing that it’s not real.”
Mr. Dilkens recently used his mayoral veto to cancel the Windsor-Detroit tunnel bus. Although the transit service is used by 40,000 people to cross the border each year, the vast majority of riders are Windsorites.
“I’m under economic assault by the United States. I am not going to subsidize bringing people over there to spend their money,” he explained. “Basically, Donald Trump killed the tunnel bus.”
He plans to cancel the city’s sponsorship of the Detroit Grand Prix if Mr. Trump makes good on his tariff threats. Additionally, he is considering changing the city’s procurement policies to buy more Canadian goods.
An economic task force for the Windsor-Essex region is also taking action. Although the short-term focus will be on lining up potential government aid for affected businesses, it also plans to help companies reconfigure their supply chains with any local alternatives.
“I don’t want to scare folks off, but it could potentially irreparably harm Windsor-Essex from an economic perspective,” said Ryan Donally, president and chief executive officer of the Windsor-Essex Regional Chamber of Commerce, referring to U.S. tariffs.
Bethany Toldo, left, president of Centoco Plastics Ltd., with her counsel, Christopher Kruba, in Windsor, Ont., on Feb. 5.Dax Melmer/The Globe and Mail
Centoco Plastics Ltd., a plastic injection moulding company that is Canada’s last manufacturer of plastic toilet seats, is assessing ways to mitigate the potential effects of future U.S. tariffs. But its executives are finding it difficult to make those adjustments because of the ever-shifting trade rules.
Although Centoco supports having retaliatory tariffs against its U.S. competitors, it also views a trade war as a triple threat to its bottom line.
Consider this: Their products will be subject to tariffs on their way into the U.S. But the key input into the toilet seats is plastic resin, which will be tariffed as it comes into Canada from the U.S. And that resin requires Canadian oil, which will also be burdened by a tariff.
“We are already struggling with the exchange rate,” president Bethany Toldo said.
“It is increasingly challenging to manufacture our own products in Canada. So having the advantage of encouraging consumers to buy Canadian is really powerful.”
Centoco also operates a plant in Arkansas. Back in 1985, then-governor Bill Clinton struck the deal to facilitate its opening.
“It’s been very symbiotic,” said Christopher Kruba, who is the company’s counsel. “At times, the Canadian operation has actually supported that U.S. operation.”
Transport trucks enter the Ambassador Bridge from Huron Church Rd., in Windsor, Ont., on Nov. 26, 2024. Each day, some 8,000 trucks carrying an estimated $400-million worth of goods flow across the city’s land border with Detroit – amounting to one-third of bilateral trade.Dax Melmer/The Globe and Mail
The uncertainty over the potential tariffs is also causing turmoil for others.
An event for new exporters to border states, which was scheduled to take place on Wednesday and advertised to Windsor businesses, was cancelled by the Ontario Ministry of Economic Development because of “unforeseen circumstances.”
The region’s greenhouse vegetable producers, which are scheduled to be in full production by the third week of March, are also struggling to make contingency plans.
Roughly 505 million kilograms of fresh greenhouse produce, including cucumbers, tomatoes and peppers, are grown in Ontario each year with a critical mass of growers located in Essex County. About 85 per cent of that greenhouse produce, worth $1.6-billion, is exported to the U.S.
“The population, based in Canada, would not be able to consume all the vegetables that we grow here,” said Richard Lee, executive director of Ontario Greenhouse Vegetable Growers.
The potential economic pain, however, is coupled with a deep emotional wound for Windsorites. For Mr. Donally, like many others, the tight social ties between Windsor and Detroit make the trade rift sting so much more.
“When it’s cold outside, we say the temperature in Celsius. When it’s warm outside, we say it in Fahrenheit,” he explained. “Our favourite teams generally are the Tigers and the Red Wings. They’re not the Blue Jays and Canadiens.”
Other Canadians, he said, like to refer to Americans as “family.” But Windsorites and Detroiters are often actually connected by blood.
“Family exists on both sides of the border for many of us,” Mr. Donally said. “So, not only is this an economic war that was potentially created, this is a permanent divide socially.”