tariff threat: southwestern ontario cities among nation's most exposed
from windsor to waterloo region, four area cities rank among those in canada that would be hardest-hit by u.s. tariffs, a new report shows.
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a car carrier leaves the stellantis windsor assembly plant with new pacifica models on monday, february 26, 2024. (dan janisse/postmedia network)
four southwestern ontario cities led by windsor – all, in the region’s auto and manufacturing belt – rank among the most-exposed cities in the country to the threat of u.s. tariffs on canadian exports, a new report by the canadian chamber of commerce shows.
nationally, saint john, n.b., and calgary, both hugely reliant on the oil industry, would be hit the hardest by u.s. tariffs, the new report by the canadian chamber of commerce says. but cities in southwestern ontario are also heavily exposed because they’re home to canada’s automotive and parts manufacturing sector, the organization reports.
after windsor at no. 3, both a border city and major auto producer, the most-exposed metro areas in the country are kitchener-cambridge-waterloo, brantford and guelph, in that order, according to the business group, which zeroed in on the region’s auto and auto parts sector, other manufacturing and agricultural exports.
“our modelling estimates that automotive and parts manufacturing would be the second-most negatively impacted sector by u.s. tariffs. therefore, it’s no surprise to see several cities in southwestern ontario occupying the 3rd to 6th spots on the list,” the chamber reported.
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at 31, london ranks in the bottom quarter of the 41 metro areas surveyed for their vulnerability to threatened u.s. tariffs, just behind moncton, n.b., and just ahead of vancouver.
according to the national chamber, london – a major manufacturing city, including of auto parts, but with a more diverse economy than many cities – exports more than $5.4 billion worth of goods to the u.s. each year, accounting for just shy of 70 per cent of all its exports.
using statistics canada trade data, the canadian chamber of commerce came up with a “u.s. tariff exposure index” to look at the potential impact of threatened american tariffs on the 41 cities. the research looked at statistics canada export data in light of u.s. president donald trump’s initial threat to impose 25 per cent across-the-board tariffs on all goods entering the u.s. from canada and mexico. trump delayed those levies until at least march 4 in response to border security commitments from both countries.
on monday trump signed executive orders to impose 25 per cent tariffs on all steel and aluminum imports to the u.s., including from canada. cities such as hamilton, ont., and sault ste. marie, ont., may be hit hardest by those specific tariffs, with their large steel industries.
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but the chamber looked at the potential impact of the across-the-board, concluding cities that export the most goods to the u.s. as a share of their economies will feel the most pain.
the researchers said saint john is the most vulnerable. it’s home to the largest crude oil refinery in canada – it can process more than 320,000 barrels daily and more than 80 per cent of that oil is exported south of the border. seafood and forestry products are new brunswick’s other top exports to the u.s.
calgary is the second-most vulnerable city because it also exports crude oil and natural gas to the u.s., the researchers say. beef is another one of its major exports that would be exposed in a trade war, the report said.
the researchers concluded that hamilton – home to canada’s steel industry – would take an economic hit, as would saguenay and trois-rivieres, home to quebec’s top aluminum and forestry producers.
the report says the saguenay-lac-saint-jean region is responsible for about a third of canada’s aluminum production, and around 85 per cent of it is exported to the u.s.
“president trump’s proposed tariffs will have significant consequences for the global economy – but for some of canada’s cities, the threat is far more local and personal,” said stephen tapp, chief economist at the canadian chamber of commerce.
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“with this analysis, canadians, businesses and policy makers have more evidence to inform ongoing discussions about how canada can best respond to the monumental challenge brought by unnecessary and unjustified u.s. tariffs.”
some canadian cities have less to fear from tariffs, the report said. they include cities on canada’s coasts, like victoria and halifax, that export more to asia or europe.
the researchers say sudbury, ont., is also less vulnerable because its exports of nickel and copper are “reaching other international markets beyond the united states.”
“the looming tariff threat is still very real: we have to remain vigilant and brace for impact,” said candace laing, president and ceo of the canadian chamber of commerce.
“already, we’ve heard from members across canada how the threat of tariffs is disrupting local businesses and economies. this new data further emphasizes that this is not a game we want to play when so many livelihoods depend on a stable relationship with the u.s.”
with london free press files
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