The city of Windsor, Ontario, is facing growing anxiety after Stellantis, a major automotive company, announced a temporary shutdown of its car assembly facility. The company blamed the decision on the new vehicle import tariffs introduced by US President Donald Trump. With the plant employing around 4,500 people, the shutdown is a significant blow to Windsor, a city that plays a crucial role in Canada’s automotive industry.
The Impact on Windsor’s Car Industry
Windsor, located just across the border from Michigan, has been a key player in the North American car manufacturing industry. For decades, Canada and the US have collaborated on vehicle production, with iconic models such as the Ford F-150 emerging from this cross-border partnership.
Derek Gungle, a long-time employee at Stellantis, said he had anticipated this disruption. His concerns echo throughout Windsor, where the automotive industry is a vital part of the local economy. The temporary shutdown of Stellantis’s Windsor facility follows the US decision to impose a 25% tariff on all vehicles manufactured abroad. While Canada has received a partial exemption, the tariff on foreign-made cars is still set at 12.5% for vehicles using over 50% US-made components.
Workers’ Anxiety Over Job Losses
Windsor’s auto workers are deeply worried about the future. Christina, who has worked for 25 years at Windsor’s Ford plant, expressed her fears for her job and the fate of her workplace. She is especially anxious about her four children, one of whom is attending university while the youngest is only twelve years old. Christina says the situation is emotionally devastating, as she struggles to ensure a stable future for her children.
With more than 4,500 people employed at Stellantis’s Windsor plant, the decision to halt operations has sent shockwaves through the local community. Workers are uncertain about whether they will return to work or face long-term unemployment.
Canada’s Response to the Tariff Crisis
In light of the US’s tariff decision, the Canadian government is fighting back. Prime Minister Mark Carney announced that Canada will impose counter-tariffs on US-made vehicles. The new tariffs will match the US at 25% for American-manufactured cars entering Canada. However, vehicles built under the North American trade agreement will only be taxed on parts that are not made in Canada.
Carney further explained that no tariffs will be placed on automotive parts, a significant difference from the US approach. He also hinted that companies investing in Canadian production could receive tariff exemptions as part of the country’s strategy to defend its interests.
Politicians across Canada have proposed different strategies to help the country’s automotive industry during this turbulent time. Conservative leader Pierre Poilievre has suggested removing federal taxes on new Canadian vehicles to boost demand. New Democratic Party leader Jagmeet Singh has called for the issuance of “Victory Bonds,” which would raise funds to strengthen the domestic economy.
North American Car Supply Chain Disruptions
The new tariffs are shaking the very foundations of the North American car manufacturing supply chain. Vehicle production in the region is highly interdependent, with cars crossing the US, Canadian, and Mexican borders multiple times before final assembly. For instance, the Ford F-150’s engine comes from Canada, its electronics from Mexico, and it is assembled in the US.
Stellantis’s decision to halt production in Windsor and other factories in North America has broader implications. The company has paused operations for two weeks in Windsor and a month in its Toluca, Mexico, plant. Additionally, Stellantis has cut 900 jobs in the US as part of the ongoing disruption.
Canada’s auto industry, which exports 93% of its vehicles—roughly 1.6 million cars annually—to the US, is particularly vulnerable. Many Canadian-made parts, which are used in vehicles assembled in the US, are now subject to the 25% American tariff. This will likely increase the cost of cars and car parts, leading to higher prices for consumers in both Canada and the US.
Rising Consumer Prices and the Economic Burden
Mahmood Nanji, a former Ontario finance official, predicts that the new tariffs will cause a rise in consumer prices. He estimates that even with the reduced 12.5% tariff, the price of a Chevrolet Silverado could increase by $8,000. He also cautioned that dealers would face difficulty selling these vehicles, potentially leading to a significant drop in demand. This, in turn, would have a harmful impact on both the Canadian and US automotive industries.
The logistical challenges of applying these tariffs are another concern. With cars and parts moving freely between borders, figuring out how to enforce the new tariffs will be a complex task for companies and border agencies alike.
Hopes for a Resolution
Chad Lawton, an auto worker in Windsor, expressed hope that the tariffs would remain temporary. He believes both the US and Canada should negotiate a resolution to avoid large-scale layoffs and further disruption. Despite his concerns, Lawton emphasized that Canada must defend its interests. He argued that the country cannot simply accept the consequences of these tariffs without resistance.
The temporary shutdown of Stellantis’s Windsor plant is just the beginning of a larger trade and economic struggle. As tensions rise between Canada and the US over tariffs, both governments face pressure to find a solution that protects jobs, stabilizes the automotive industry, and ensures the smooth functioning of the North American car manufacturing supply chain.