'It’s Americans who are paying' tariffs, says Linda Hasenfratz
Trump has been creating uncertainty in the industry since he took office in 2017, first by threatening to rip up NAFTA if a renegotiated trilateral trade pact couldn’t be reached and following that up with tariffs on metal from Canada and Mexico. He then threatened tariffs on European auto imports and has slapped billions of dollars in duties on imports from China.
“It’s Americans who are paying,” Hasenfratz said. “Either the administration doesn’t understand [who pays tariffs] or it is deliberately misleading the public.
The anecdote drew plenty of laughter from the hundreds of suppliers in attendance.
Linamar, based in Guelph, Ontario, said during a quarterly report in May that the industry "is softening." Meanwhile, Canadian competitor Magna International Inc. cut its 2019 forecast around the same time "to reflect lower vehicle production globally."
Still, Hasenfratz, who was part of a group advising Canadian Foreign Affairs Minister Chrystia Freeland during NAFTA talks, has a positive outlook for the industry.
“What’s going on politically will have a short-term impact. Tariffs are not something you can have long-term. No one has ever built an economy on tariffs,” she said.
Hasenfratz said the ongoing uncertainty shouldn’t fundamentally change where suppliers and automakers build parts and cars.
“When you have short-term political issues, they may be used as tactics to get a resolution to something, but ultimately the fundamentals will prevail,” Hasenfratz said. "It makes more sense to not have tariffs.”
Instead, Canada, Mexico and the United States should “find out what each country is great at and be competitive globally.”
