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Washington hearing could determine fate of local auto jobs

Washington hearing could determine fate of local auto jobs

Scheduled to represent Canada and Ontario at the hearing will be Canada’s Ambassador to the U.S. David McNaughton and Ontario’s Minister of Economic Development and Trade Jim Wilson.

DAVE BATTAGELLO, WINDSOR STAR
July 16, 2018

A trade hearing on Thursday in Washington, D.C., has huge ramifications for thousands of Windsor-area manufacturing jobs, according to Canadian politicians, diplomats and those in the auto sector.

The U.S. Department of Commerce is receiving testimony from industry and political leaders from around the world on the impact of introducing 25-per-cent tariffs on the auto sector, a move under consideration during the ongoing trade war launched by U.S. President Donald Trump.

Scheduled to represent Canada and Ontario at the hearing will be Canada’s Ambassador to the U.S. David McNaughton and Ontario’s Minister of Economic Development and Trade Jim Wilson.

“We will be watching this very closely,” said local MP Tracey Ramsey (NDP—Essex), a former autoworker who has been outspoken on the ramifications of U.S. tariffs on the auto manufacturing and parts industry. “This hearing is extremely important.”

Information gathered at the hearing — which includes a full day of testimony from 44 scheduled industry and federal leaders from around the world — will lead to recommendations by U.S. Secretary of Commerce Wilbur Ross to Trump regarding new tariffs on the auto sector.

The public hearing is being done under Section 232 — National Security Investigation of Imports of Automobiles and Automotive Parts.

“This is extremely serious for southwestern Ontario,” Ramsey said. “Many people in our region are extremely nervous on what the president will do following these hearings.”

With up to 1.3 million jobs that rely in some way on cross-border trade — a majority tied to the auto manufacturing sector — there is no province in Canada with more at stake in the ongoing trade and tariff war than Ontario, Wilson said on Monday.

But many American jobs are also dependent on the two-way trade. U.S. auto parts account for roughly 45 per cent of the content of vehicles assembled in Canada.

“We want to remind our American friends why our trade relationship is so vital,” the trade minister said in a telephone interview on Monday. “These trade tariffs will hurt more Americans than Canadians. You have nine million American (jobs) that depend on the trade relationship with Canada.”

Maybe at the end of the day they are not interested in the facts

Wilson’s goal during his testimony will be to emphasize “the deep integrated supply chain” that has companies and workers within the auto manufacturing and parts sector of both countries “totally reliant on each other.”

“We are in no way a national threat to the U.S.,” he said, noting the well-known example of many auto parts manufactured in the region moving back and forth across the Canada-U.S border up to seven times before a vehicle is completed.

The minister said there is no vehicle manufactured anywhere in Canada, the U.S. or Mexico that doesn’t include parts from a nation outside its borders, he said.

“We are going to kill them with kindness and do what we can to influence everyone around the panel,” said Wilson of his testimony. “Maybe at the end of the day they are not interested in the facts, but I have to deal with the cards we have. We are happy to have this opportunity. ”

Having such high-ranking Canadian representation included at the hearing in Washington is critical in terms of “due diligence” on the auto tariff debate, said Flavio Volpe, president of the Automotive Parts Manufacturing Association.

Following the hearing, a report from the U.S. commerce department and Ross could come as quickly as early August, he said.

If Trump imposes the 25-per-cent tariffs on automobiles and parts, the impact will be felt “almost right away,” Volpe said.

“The shock of a 25-per-cent increase on products that trade in single-digit margins will be immediate,” he said. “You will stop production and shipping products into the U.S. and vice versa. It will grind everything to a halt.”

Major auto manufacturers, some of which have already issued warnings publicly about the potential financial fallout of tariffs, are likely to go to court to halt their implementation if approved by Trump, Volpe believes.

“These are companies with market caps in the $50-billion range,” he said. “It would be naive to think they won’t hit back in court.”

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