Canada retaliates against US tariffs: What does Section 338 mean, how are Canadian small businesses impacted, and who pays the price in a trade war?

Automotive tariffs which have just been announced, any updates on that sector?

We're re- We're s- located in Ontario, so we understand that it's a large automotive hotbed, and a lot of our products and supply chain crosses the border multiple times.

So we have a lot of, I'd say, our production that would take place in raw materials that were being manufactured in, say, Detroit, going to Windsor for the process, back to Detroit, back to Windsor.

It was all integrated in the supply chain there.

Whereas now the tariffs, if they're up to 50 or 100%, depending on the product, the actual cost to the user will be about $6,000 on, say, a Ford truck, just from the additional tariffs crossing the border both ways.

And unfortunately, that will get passed on to the consumer.

You said cost to the user rather than to the supplier.

Yeah.

So the supplier will, as you're importing the product, it will be the importer, but then they'll pass it on to all the way down the supply chain.

So the first one where you're taking that just straight aluminum or steel, that gets added, the tariff cost gets added.

Then to the next, it will get added.

So you're gonna see the 50% just be that combination effort.

effort.What will the effect be for the Detroit processing plant who is reliant on this trade northwards with-

Now they're gonna have to try to find these materials, and we've seen within our current clients as well that as they put tariffs on these items in the US, so now that the US isn't getting as much steel from the international market, they don't have the actual manufacturing punching units or processing fabrication.

So a lot of US companies acquired Canadian fabrication companies thinking that it was the appropriate means, and now unfortunately, the tariffs are making that redundant.

So our clients that are cross-border are looking at it saying, "Okay, well, it doesn't make sense to ship the product to produce in Canada anymore, but we don't have the supply in the US, so what do we do?" So all it's doing is adding longer lead times to production to be produced, and I'd say the steel manufacturers are really looking at how do they increase their output, and right now they don't have the time to be able to increase their output for the demand on steel.

So it really seems to be causing a lot of shocks in the supply chain, and I'd be interested to see what happens next if they take the same approach with the southern border of Mexico, or if we see some international allowances on metal fabrication.