Automotive and parts manufacturing will take one of the biggest hits from threatened tariffs on Canadian exports to the United States, placing Waterloo region among the the most vulnerable urban centres in Canada to U.S. President Donald Trump's threatened tariffs.
The region exports more than 40 per cent of goods to the U.S. and will be particularly vulnerable if a trade war escalates according to a new report from the Canadian Chamber of Commerce, which ranks cities in terms of vulnerability.
Based on the intensity of exported goods to the U.S., Kitchener, Waterloo and Cambridge ranks about 15 to 20 per cent ahead of Brantford and Guelph on a tariff exposure index.
The region is only behind Windsor, which exports 60 per cent of its goods as a share of gross domestic product to the U.S., Calgary, which exports more than 80 per cent of its manufactured goods to the U.S. and Saint John with the highest vulnerability at 131 per cent on the tariff exposure index.
Energy exports, particularly oil and gas, will be hardest hit.
The Canadian business association estimates automotive and parts manufacturing would be the second most negatively impacted sector.
Since Kitchener-Cambridge-Waterloo (KCW), Brantford and Guelph specialize in producing auto parts, other advanced manufacturing and machinery and equipment, as well as agricultural exports, the report says it lies squarely in the crosshair of Trump's threatened trade war.
KCW is home to more than 1,000 companies that export to the U.S.
Guelph is home to Linamar’s headquarters, Canada’s second largest auto parts maker, as well as Sleeman Breweries.
The Region of Waterloo responded to the threat yesterday with directives to staff that were quickly followed by the City of Cambridge to develop procurement plans that prioritize local and Canadian products.
"Manufacturing is a key pillar of our economy accounting for approximately 20 per cent of our gross domestic product and up to 17 per cent of our workforce," Regional Chair Karen Redman said.
Nearly $19.4 billion in exports flowed from Waterloo region businesses in 2023 with $18.9 billion of that directly in manufacturing.
"If these tariffs are enacted we risk seeing supply chains disrupted, jobs threatened and businesses struggling to compete in their largest export market," she said.
Earlier this month, Cambridge Chamber of Commerce president Greg Durocher sent a message to its members assuring them that local business organizations are developing programs to help find Canadian suppliers and customers.
"We are fighting hard to get inter-provincial trade barriers removed," wrote Greg Durocher. "If we can trade freely with 51 countries in the world, we should be able to trade freely amongst ourselves."
He said the local chambers are also working with the Ontario Chamber on a trade mission program to the European Union that will be available to all local businesses with a goal to help them connect directly with suppliers or customers and strike new deals.
"We can no longer be dependent on one place to do business; we must divest of our interests globally and build on those new relationships and friendships," he wrote.