As the United States gears up for one more presidential election, Canada’s auto business faces the opportunity of a Donald Trump comeback. Despite an avalanche of authorized troubles, the previous U.S. president stays the best choice amongst Republican voters to steer their social gathering in November 2024.
In late August, Trump vowed to impose large new tariffs on all overseas items — particularly a 10-per-cent tax to assist construct a “ring around the U.S. economy.”
“When companies come in and they dump their products in the United States, they should pay, automatically, let’s say a 10-per-cent tax. … I do like the 10 per cent for everybody,” Trump stated in an interview with Fox News.
Trump’s penchant for protectionism is nothing new, and Canada’s political and auto business leaders are well-trained in battling commerce disputes with U.S. administrations of various political stripes, stated Flavio Volpe, president of the Automotive Parts Manufacturers’ Association (APMA).
“We’re going to always be fighting protectionism because it works to whip up votes south of the border,” Volpe stated, citing the Joe Biden administration’s Inflation Reduction Act (IRA).
The laws, which gives billions in tax credit for firms producing important minerals and battery parts within the United States, compelled Canada to up its sport over the competitors for EV supply-chain funding.
Before the introduction of the IRA, Canadian lobbyists in Washington efficiently fought makes an attempt by the Biden administration to implement electric-vehicle rebates favouring U.S.-based automakers that make use of unionized staff, Volpe famous.
“I think a lot of us, especially me, have assumed that this is the new normal,” he stated.
But Trump tends to take his rhetoric up a number of notches, unleashing chaos and uncertainty. “Trade wars are good, and easy to win,” he tweeted in 2018.
During his time within the White House from 2017 to 2021, he imposed a 25-per-cent tariff on metal imports and a 10-per-cent levy on aluminum imports. Those had ripple results all through the automotive provide chain, boosting prices and squeezing components makers.
In response, Canada imposed retaliatory tariffs in opposition to the United States.
When Trump’s administration renegotiated the North American Free Trade Agreement (NAFTA) into the United States-Mexico-Canada Agreement (USMCA), it introduced important adjustments to the automotive sector and earned Canadian negotiators their stripes when it got here to defending the nation’s pursuits.
Ideally, business stakeholders ought to be working with authorities to formulate a just-in-case-Trump-wins technique. Indeed, federal Foreign Minister Melanie Joly has stated Ottawa is mulling a “game plan” within the occasion the U.S. takes an authoritarian flip subsequent November.
In actuality, Ottawa and business stakeholders should await the end result of subsequent yr’s presidential election, stated Volpe.
“You can say you’re preparing, meaning that you might be emotionally preparing for a return of the chaos,” he stated. “But you can’t do anything from a policy point of view before that.”
Source: canada.autonews.com