Canadian Linamar CEO: Tariffs will put the North American auto industry in crisis
US President Trump last month ordered an investigation into whether imported cars threaten US national security, which could lead to Washington imposing up to 25% on imported cars. Linda Hasenfraz said in an e-mail on Wednesday (June 27, local time) that the US’s previous tariff of 25% on imported steel and aluminum materials was “unbearable”.
She also said: "If the import tariff policy is officially implemented, the price of imported products will inevitably increase sharply. This part of the cost will also be passed on to consumers. Consumers will stop buying our products, and Linamar's business in the automotive market will be Faced with the fate of the crash. This is even worse than what we faced in the financial crisis of 2009. In addition, the above situation will trigger a wide range of layoffs, and in the future, consumer demand for almost all goods will be weakened. The US economy will therefore fall into recession.” Linamar is an automotive industry supply company based in Ontario, Canada, with production facilities in 11 countries including the United States and Mexico.
Due to the recent instability in the trading market, Linamar's share price has been hit hard. Since mid-May this year, the company's share price has fallen by 22%.
The famous motorcycle manufacturer Harley-Davidson announced on Monday that it plans to transfer part of its production operations outside the United States. This decision is the company's response to the EU's retaliatory tariff policy toward the United States. Trump's decision to transfer some of his business out of the US made Trump very angry. He said through Twitter that the company's decision was the beginning of Harley-Davidson's fate.
Linda Hasenfraz said she does not support Canada's practice of quotas and tariffs on steel and aluminum materials imported from countries other than the United States. It is worth mentioning that the Canadian side is currently preparing to prevent global companies from dumping into the Canadian market in order to avoid US tariffs.
According to informed sources, the new tariff policy for imported cars in the US will be announced as early as next week. The tariff rate in this new deal will be higher than the tax rate for Canadian imports to the US that will be officially effective on July 1.
Linda Hasenfraz also said: "It is never a good thing to levy tariffs. It will only increase costs and ultimately hurt the interests of consumers and thus impact the national economy at a broader level." She also pointed out that the United States is importing Tariffs on metal materials have increased the cost of the automotive industry, which will eventually lead to the loss of jobs.
Linda Hasenfraz stressed that if the US auto tariff is higher than the metal material tariff, then the next and final consequence of such taxation is an economic disaster. She also said that as far as she knows, no car manufacturer or supplier hopes that this will happen.
It is reported that Linamar is the second largest auto parts company in Canada, and the number one is Magna International Inc. in Aurora, Ontario.