Windsor workers feel whiplash as tariff flip-flop rattles local auto industry

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Jonathon Azzopardi, a manufacturer for the auto industry, needs to ship a piece of equipment from Windsor, Ont., to Detroit next week, but U.S. President Donald Trump’s tariffs have cast the normally straightforward process into uncertainty.

The tariffs, which came into effect Tuesday, upended decades of free trade and established customs processes by placing blanket 25-per-cent levies on most exports from Canada and Mexico. Around 2 p.m. on Wednesday, the President granted a 30-day reprieve for vehicles assembled in either country.

It gave Mr. Azzopardi – and the entire sector – more time. But it isn’t necessarily good news.

“Sometimes the uncertainty is worse than the decision,” he said.

In the neighbouring motor cities of Windsor and Detroit, the turmoil created by Mr. Trump’s on- and off-again tariff threats has eaten into profits for months and strained long-standing business relationships. It has also threatened at least 100,000 automotive jobs in Ontario.

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Industry voices argue that eliminating free trade will hurt a sector struggling to stay competitive with encroaching Chinese rivals. They say that Mr. Trump’s reprieve might help for the time being, but it does nothing to solve the bigger problem.

The temporary pause was put in place so carmakers can begin shifting production to the United States, the White House said. The stated ambition remains the same: remake the American manufacturing sector, perhaps to the detriment of those in it.

“If he honestly believes this is what is best for the U.S. economy, then we got to start listening,” Mr. Azzopardi said.

Louis Jahn, president of the Canadian Tooling & Machining Association, said Windsor has a niche with regards to tooling and equipment for auto manufacturing.

Mr. Azzopardi occupies this space. He builds equipment, parts and also the moulds that form the plastic features in a vehicle’s interior. He has customers in Detroit and across the U.S.

Since Mr. Trump was elected in November, Mr. Azzopardi has seen a significant drop in activity from buyers. He has tried to develop a pricing process to minimize costs carried by the buyer and add more stability and certainty to his supply.

Transfer pricing accounts for each component of the equipment or part. For example, if the steel is American, it would not be subject to a tariff. And because the engineering expertise required to design the piece doesn’t cross the border, this would also be discounted. It could reduce the cost of the tariff. This is an option for Canadian sellers, but Mr. Azzopardi is still not sure if it would be accepted.

Mr. Azzopardi is also planning to lower his prices. This would make him unprofitable, but maintaining his relationships with buyers is more important in the short term, he says.

To Mr. Jahn, suppliers such as Mr. Azzopardi are an essential part of a fully assembled vehicle, and there isn’t expertise or labour within the U.S. to replace what Canada offers. It would take the U.S. 10 to 20 years to develop this capacity, he said.

For this reason, a 25-per-cent tariff on Canadian goods will not kick-start manufacturing in the U.S., Mr. Jahn said. It will only encourage auto manufacturers to source from cheaper markets, notably China. Cheap labour and heavy government subsidies mean that China can drop prices substantially to accommodate tariffs, he said.

It’s simplistic – and unrealistic – to say the U.S. could replace Canada with China, said Glenn Stevens Jr., executive director of industry association MichAuto at the Detroit Regional Chamber. However, he said China is one of North America’s major competitors in auto manufacturing – and growing quickly.

China is producing in abundance and building new plants in locations such as Mexico and Eastern Europe, he said. Not too long ago, companies such as General Motors, Volkswagen and Audi were top choices for the Chinese consumer. “That’s changed,” he added.

With a typical vehicle containing 30,000 components, he said, having a highly skilled neighbouring automotive sector with similar values and a steady supply of essential parts and equipment keeps Detroit’s auto industry competitive.

“We want more Michigan manufacturing. We want more research. We want more development, but I can’t sit here and say that I want that at the expense of Ontario,” he said.

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John D’Agnolo, president of Unifor Local 200 in Windsor, where he represents 2,000 Ford workers, said the machines that his members use to make engines for Ford’s F-150 trucks take years to build. It’s absurd to think they can simply be replaced, he said. “You just can’t pick up my engine plant and move it. And by the way, we won’t allow it.”

Not everyone in the U.S. auto industry is as concerned about tariffs.

United Automobile, Aerospace and Agricultural Implement Workers of America, which represents workers in Detroit’s auto sector, said in a press release Tuesday that tariffs were a “powerful tool” to re-establish worker rights.

“We are glad to see an American president take aggressive action on ending the free trade disaster that has dropped like a bomb on the working class,” the statement said.

On the other side of the Detroit River, just before 7 a.m. marked the shift change at the Stellantis Windsor Assembly Plant. It was dark and rainy, and workers were nervous.

On Wednesday, prior to Mr. Trump’s reprieve announcement, many workers were expecting layoffs and a work stoppage.

“If it happens, it’ll be very quick,” said worker Deb Walesiak.

“We lose our jobs if it continues,” said worker Steve Leather, who was hoping for a deal between Canada and the U.S. on Wednesday.

The reprieve fell short of these hopes, leaving the thousands of Ford workers Mr. D’Agnolo represents in a prolonged state of stress: “It just keeps them on edge.”

Whether it’s a real tariff or the looming threat of one, the constant uncertainty hurts Canadian and American auto workers, and every other business that benefits from a thriving auto industry, Mr. D’Agnolo said.

“It’ll decimate this community for sure. We’re in auto town.”