\u201cI still believe that if they put tariffs on parts, it would bring the industry to its knees because it\u2019s such an integrated supply chain of parts going back-and-forth the border multiple times,\u201d Hasenfratz said. (Andrew Francis Wallace\/Toronto Star via Getty Images) \u00b7 Andrew Francis Wallace via Getty Images <\/p>\n
Linamar executive chair Linda Hasenfratz is urging Ottawa to defend the CUSMA trade pact, warning that any move to impose tariffs on auto parts could severely disrupt the industry\u2019s deeply integrated North American supply chain.<\/p>\n
Automakers have been hit hard by U.S. President Donald Trump\u2019s trade war due to tariffs on exported vehicles and metals, which have negatively impacted their bottom lines. Yet, within the automotive industry, the vast majority of products crossing the border, particularly parts, are CUSMA-compliant and operating under zero duties.<\/p>\n
Still, there\u2019s a risk that could change. Hasenfratz, board chair of the Association of Equipment Manufacturers, is urging the federal government to work hard to maintain the CUSMA agreement, warning that dismantling it would have a devastating impact on the economy.<\/p>\n
\u201cWhile its spirit and substance have been undermined by the Trump administration, the Canada-U.S.-Mexico Agreement has thus far been key to Canada\u2019s perceived safety net,\u201d said CIBC Capital Markets economist Avery Shenfeld.<\/p>\n
Canada\u2019s advantage from the CUSMA carve-out is only as strong as the agreement itself, which will lapse in 2026 unless all parties agree to renew it, he says.<\/p>\n
\u201cThe cloud of uncertainty will hang over capital spending plans in a broad range of Canadian export sectors,\u201d Shenfeld added, noting that Canada could lose its special exemption at any time.<\/p>\n
\u201cI still believe that if they put tariffs on parts, it would bring the industry to its knees because it\u2019s such an integrated supply chain of parts going back-and-forth the border multiple times,\u201d Hasenfratz said. Trying to apply a tariff on each of those crossings would be enormously expensive, she says.<\/p>\n
After decades of free trade, trying to \u201cunscramble the eggs,\u201d as many people have said, would be difficult, costly, and wouldn\u2019t create value, she adds.<\/p>\n
\u201cLet\u2019s address the concerns that exist and make sure that people are feeling comfortable with the trade agreement we have in any areas that are felt to be lacking,\u201d Hasenfratz said.<\/p>\n
If CUSMA stays intact, Linamar stands to benefit as its customers look to onshore products currently sourced from Asia and Europe. With new international trade deals in place, clients are comparing tariff costs, and that\u2019s prompting many to consider localizing their supply chains.<\/p>\n
\u201cI see this as a real opportunity for us to potentially get some new business and we\u2019re quoting on such opportunities.\u201d<\/p>\n
Hasenfratz is optimistic that Canada\u2019s automotive sector will remain a pillar of the economy. Suppliers, she notes, play an essential role and are poised for growth. She also believes Canada will continue to be a home for vehicle assembly due to its productivity, talent pool, and green, low-cost energy.<\/p>\n","protected":false},"excerpt":{"rendered":"\u201cI still believe that if they put tariffs on parts, it would bring the industry to its knees…\n","protected":false},"author":2,"featured_media":61309,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[45634,45633,28,103,45631,12,101,45630,45632,45629],"class_list":{"0":"post-61308","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-andrew-francis","9":"tag-automakers","10":"tag-business","11":"tag-canada","12":"tag-cusma","13":"tag-donald-trump","14":"tag-economy","15":"tag-hasenfratz","16":"tag-linamar","17":"tag-linda-hasenfratz"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/61308","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=61308"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/61308\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/61309"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=61308"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=61308"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=61308"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}