Donald Trump wants to destroy the automobile sector for imports into the United States in order to force carmakers to build manufacturing facilities in the United States.
What if automakers shocked America, and simply boycotted the United States, not selling cars there?
Americans would be incensed with Trump.
Personally I wouldn’t want to buy any of the domestically manufactured cars, be it Ford, Chevrolet or Stallantis.
Instead of bowing down to American extortion, boycotting America would send shockwaves through American business.
For Canada, if Trump intends on reshoring all of the domestic car production into the United States, what if Canada and Mexico simply banned the importation of American vehicles, period.
Domestic consumption alone, would soon achieve saturation in the United States. If Americans wanted Japanese or Korean vehicles, or European vehicles, then Americans would simply have to pay the costs.
For Canada, Trump’s forced reshoring of Ford, Stallantis and Chevrolet would certainly hurt in Canada, for a time. But Canadians should immediately drop all tariffs on Chinese and Indian car manufacturers and invite manufacturers like BYD and Geely to Canada to replace any lost capacity due to America.
Manufacturing vehicles in the United States vs Canada will simply mean that whatever manufacturer moves, will increase the production cost and materials cost of their vehicles appreciably, not just due to cheaper labour costs in Canada, but due to cheaper material costs, and the substantial difference in the dollar.
When an American decides to buy his Ford F-150 and finds out it has increased by 20%, I’m not so sure that Trump will be hailed as a hero. Remember, there was a reason why manufacturers chose to offshore or nearshore their manufacturing, and it was all due to costs.
Military industrial companies in Canada may well be the beneficiary of Trump’s extortion attempts, as the demand for tanks, IFV’s, artillery, munitions and aircraft can be filled by the manufacturing plants that will no longer be making American cars.
There are appreciable spin off benefits for Canada as well, in that the change will increase electrification in Canada for all vehicles. Since Canada has a wealth of hydro electric power, manufacturing costs related to energy in Canada will be substantively cheaper than in the United States,
Additionally, raw materials such as steel and aluminum will find the supply chain in Canada is excellent and the costs cheaper than producing in the United States.
E.U. Weapons manufacturers may want to build plants in Canada where they are safe for production, removed from countries like Russia. It would ensure production capacity, while increasing the speed with which weapons systems can be procured and supplied.
If tariffs are protracted, Canada should cut off all energy supplies to the U.S., after diversifying their markets and sending oil, petroleum products, rare earth products, steel and aluminum, potash and food grains to Asia, the U.K. and the E.U.
What America plans may well backfire completely, as once Canada has rebuilt its supply chains and partners, we will never be coming back to do so with America.
America wants isolationism.
Okay, America.
You win.
We’ll isolate you forever.
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