Trump tariff threats already costing Windsor millions in lost business

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The steel and aluminum tariffs announced Monday by President Trump, which could reach as high as 50 per cent, won’t take effect until March 12 but the uncertainty that’s been created is already costing local manufacturers millions of dollars.

“I’ve already had about $5 million worth of work, that should’ve been placed at Cavalier, not get placed,” said Cavalier Tool and Manufacturing president Brian Bendig. “They kept it in the states.”

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Trump also mused aloud about possible tariffs of up to 100 per cent on the Canadian auto industry, which would hit Windsor particularly hard.

“If we don’t make a deal with Canada, we’re going to put a big tariff on cars,” Trump said during an interview with Fox News on Monday. “Could be 50 or 100 per cent because we don’t want their cars. We want to make the cars in Detroit.”

With Trump constantly changing deadlines and moving the goalposts, it’s disrupting businesses on either side of the Canada-U.S. border in various sectors. The latest steel and aluminum tariffs are currently the most pressing, proving particularly troublesome and slowing local business activity.

“The other problem we have right now, we don’t know how to price our jobs because of all these tariffs,” Bendig told the Star. “How do they set a budget on their side?

“People are scrambling and pivoting. The reality is almost nothing is moving.

“Our quotes are down. Our orders are down our purchase orders are down. They (U.S. customers) want to work with us, but they’re just not sure how.”

While larger local companies like Cavalier can ride out the turbulence for a while, Bendig fears for the smaller firms.

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“The younger, smaller shops we don’t feel will be competitive at all and more than likely will close,” Bendig said. “A lot of the small shops rely on guys like us to feed them.

“If my orders get cut back 20 to 30 per cent, the ripple effect is my supplier at the bottom is stopped immediately because I don’t have anything to give to him.

“That’s already happening. I’m taking phone calls, ‘Can you give me this or that?’ and I can’t because I’m keeping it in-house.”

Canadian manufacturing won’t be alone in experiencing the pain of Trump’s tariffs, said Peter Frise, a University of Windsor professor of mechanical and automotive engineering.

The cascading effect will impact every facet of the U.S. economy, driving inflationary pricing from automotive vehicles to canned goods to aerospace and construction, he said.

“It’s a puzzling move because American business and consumers will be hurt as much or more than Canadian business and consumers,” said Frise, who is also the former director of UWindsor’s Automotive Research and Education Centre.

“In the end it will lead to products costing more and a drastic decrease in production. Once products, like cars stop selling because they cost thousands more, it’s a pretty straight line to layoffs.”

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Frise said he knows local manufacturers have tried to increase their inventory of steel and aluminum to avoid the tariffs, but that is a small and short-term solution.

“When sales dry up sufficiently, there’s going to be layoffs locally,” Frise told the Star. “It’ll hurt Windsor companies because they also rely on a lot of American parts. The costs of those minivans will rise.

“This is a very serious situation and I don’t think it’s going to go away. Trump will keep coming back for more.”

While Trump has long believed tariffs will help the U.S. increase its domestic production of these two key products, U.S. trade statistics indicate that strategy doesn’t work.

The U.S. steel industry’s production in 2024 was one per cent lower than in 2017 when Trump first used his tariff club. U.S. aluminum production has dropped nearly 10 per cent over the same time frame.

Trump is not listening to anyone from Canada

“They are vulnerable on steel and aluminum, that’s why this strategy makes no sense,” Frise said. “It’s just a 25 per cent tax on Americans.”

Frise said he expects the American business community will prove Canada’s best ally in securing a negotiated end to tariffs.

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“The best thing we can do is inform our partners in the U.S. business community to take this issue on,” Frise said. “Trump is not listening to anyone from Canada.

“However, he is tuned into the U.S. business community. My guess is there is a vigorous but quiet effort from U.S. business going on behind the scenes.

“They don’t want to be harmed by this.”

Those American voices grew louder Tuesday when Ford Motor Company CEO Jim Farley told those gathered at the Wolfe Research Auto Tech and Semiconductor Conference in New York City that Trump’s tariffs were resulting in a ‘lot of cost and a lot of chaos’ in the automotive industry.

Farley said Trump’s package of tariffs threatened to “blow a hole in the U.S. industry like we’ve never seen.” He was scheduled to be in Washington D.C. Wednesday to meet with federal officials to discuss his concerns.

The U.S. vulnerability on metals is illustrated by it needing to import 80 per cent of the aluminum it uses, with Canada supplying 60 per cent of the total American need.

Canada shipped 3.2 million metric tons of aluminum to the U.S. in 2024 worth $15.9 billion.

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Canada supplied about one quarter of the steel the U.S. imported in 2024 while 40 per cent of Canadian steel imports come from the U.S.

Laval International president Jonathon Azzopardi cautioned Canadian government officials need to be strategic and targeted in any tariff responses. He noted slapping a 25 per cent tariff on U.S. steel would be a double tariff on Canadian manufacturers.

“We import U.S. steel and turn it into something else that we ship back to the U.S.,” said Azzopardi, whose firm is located in Oldcastle.

“They do something with it then, ship it back to us to finish. That would be a lot of tariffs to take.”

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