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The trucks that carry about $300 million worth of auto parts each day over the bridge from Windsor, Ontario, to Detroit are still rolling as usual. But in the aftermath of President Trump\u2019s decision to impose 25 percent tariffs on most categories of Canadian exports, the mood in Windsor, like all of Canada, was transformed.<\/p>\n
Mr. Trump\u2019s move has ignited a sense of economic anxiety and anger among Canadians about how they are being treated by their neighbor, ally and best customer. Most are still puzzling over Mr. Trump\u2019s motivations and objectives for the tariffs, as well as his comments about annexing Canada as the 51st state.<\/p>\n
And as they turned their attention to getting the potentially crippling tariffs, and a 10 percent levy on Canadian oil and gas and some minerals, lifted, politicians, business people and ordinary Canadians say that the relationship between the two countries will never return to what it once was.<\/p>\n
Flavio Volpe, the head of a Canadian auto-parts maker trade group, said that his members could start shutting down factories in days, and that he feels betrayed by the United States.<\/p>\n<\/div>\n<\/div>\n
\u201cWe\u2019ve built two societies on the same values,\u201d said Mr. Volpe, who is also a member of Prime Minister Justin Trudeau\u2019s Council on Canada-U.S. Relations<\/a>. \u201cThe man in the White House did a U-turn and drove right over us.\u201d<\/p>\n<\/div>\n<\/div>\n Mr. Trudeau and anxious business leaders throughout Canada said that their country\u2019s focus must be on ending the tariffs as quickly as possible.<\/p>\n Most forecasts project that Canada\u2019s export-dependent economy will be sent into a recession<\/a>, although they differ on timing and its initial severity.<\/p>\n \u201cWe have a limited experience for this magnitude of a trade shock,\u201d the Royal Bank of Canada, the country\u2019s largest financial institution, said this week<\/a>. Some Canadians reached back for comparison to the Smoot-Hawley tariffs of 1930, which raised the average U.S. import duty to a staggering 59.1 percent. Many economists believe that they worsened the Great Depression, but the two countries\u2019 economies were far less integrated at that time.<\/p>\n<\/div>\n<\/div>\n Aside from oil and gas, Canada\u2019s largest export sector is the auto industry. On Tuesday, Mr. Trump suggested that the only way out of tariffs for the sector is to move all of its production to the United States. Aside from abandoning a skilled work force, that would require billions of dollars in new investments.<\/p>\n<\/div>\n<\/div>\n Historically, automotive trade has been largely balanced<\/a> between the United States and Canada. Parts often swirl around between Canada, the United States and Mexico, sometimes crossing borders repeatedly before winding up in vehicles in a dealer\u2019s showroom.<\/p>\n Mr. Volpe, of the Automotive Parts Manufacturers\u2019\u200b Association in Canada, said that, aside from the tariffs, trade remained unchanged on Tuesday, an assessment backed up by the usual migration of trucks to the Ambassador Bridge.<\/p>\n The 25 percent tariffs are being paid by the importers, either other parts makers or automakers. Most contracts allow an automaker to deduct tariffs it pays when settling a parts company\u2019s bill.<\/p>\n<\/div>\n<\/div>\n Mr. Volpe said that those deductions will make parts suppliers, which have generally have single-digit profit margins, instantly and deeply unprofitable.<\/p>\n He expects that most of his members can cover those losses from their cash reserves for about a week. After that, they will be forced to stop shipments.<\/p>\n \u201cNo one is going to burn up their cash reserve for the president of the United States,\u201d he said.<\/p>\n For more parts, automakers usually have no alternative suppliers, let alone ones in the United States. Setting up new suppliers would take time and substantial investment. The result, experts say, will be a parts shortage that rapidly cascades into assembly-line shutdowns. Thousands of workers in Canada, the United States and Mexico would be left idle.<\/p>\n Some industries began idling small numbers of workers before the tariffs came into effect.<\/p>\n<\/div>\n<\/div>\n Bill Slater, the president of a United Steelworkers local in Sault Ste. Marie, Ontario, said that Algoma Steel laid off about 20 of his members who are salaried employees, citing the tariffs. He said that a number of probationary hourly workers were also let go by the mill.<\/p>\n<\/div>\n<\/div>\n Truck drivers had a mixed experience. Stephen Laskowski, the president of the Ontario Trucking Association, said that some had a surge in business as companies moved to get products into the United States before the tariffs came into effect, while others were laying off drivers because customers were canceling shipments.<\/p>\n Canada\u2019s forestry industry knows tariffs all too well. Special U.S. duties on softwood lumber go back decades and were a factor in Canada seeking the 1989 free trade agreement with the United States, which was later expanded to include Mexico. (Canada has repeatedly failed to get an exemption from the U.S. trade complaints system that imposes the softwood lumber tariffs.)<\/p>\n But Kurt Niquidet, the president of the British Columbia Council of Forest Industries, said that adding the 25 percent tariff \u201creally puts us into unprecedented territory.\u201d<\/p>\n Lumber mills in the western province are facing a dizzying array of tariffs. This week\u2019s 25 percent tariff is on top of a 14.4 percent tariff that the U.S. government expects to raise this summer, to more than 27 percent. Then Mr. Trump announced last weekend that he\u2019s opened an investigation into lumber imports that could result in even more tariffs<\/a>.<\/p>\n<\/div>\n<\/div>\n While the United States supplies about 70 percent of its own lumber, Mr. Niquidet, an economist, said that American forests and mills cannot replace all the lumber from Canada, nor can it be sourced from other countries.<\/p>\n<\/div>\n<\/div>\n \u201cThere will still be imports from Canada,\u201d he said. \u201cPrices in the U.S. will rise.\u201d Some Canadian lumber mills, however, may not survive the trade assault, he added.<\/p>\n While Mr. Trudeau speculated that Mr. Trump was seeking a \u201ctotal collapse of the Canadian economy, because that\u2019ll make it easier to annex us,\u201d Mr. Volpe said he was not sure it\u2019s that complicated.\u201cIf it looks like he is dismantling the structure of the postwar economy, then he is,\u201d Mr. Volpe said. \u201cWhat are you going to do about it?\u201dsome Canadians believe that their country is simply being used as part of Mr. Trump\u2019s plan to fund substantial U.S. tax cuts with tariffs.<\/p>\n Jean Simard, the president of the Aluminum Association of Canada, fought a successful battle over the 10 percent tariff on Canadian exports of the metal Mr. Trump enacted in during his first administration. Now Mr. Simard, another member of Mr. Trudeau\u2019s council, is attempting to fend off additional tariffs that Mr. Trump has promised to put on top of Tuesday\u2019s 25 percent. He said that he believes the president is telling the world: \u201cThis is what I\u2019m able to do to my closest allies \u2014 think about what\u2019s awaiting you.\u201d<\/p>\n Mr. Simard added: \u201cIt\u2019s an old barbarian approach to war.\u201d<\/p>\n<\/div>\n<\/div>\n As the tariffs were rolled out, actions against American goods quickly came into play. Government-owned liquor stores, including in Ontario, pulled U.S. beer, wine and spirits from off their shelves, and that province canceled a 100 million Canadian dollar ($69 million) contract with Elon Musk\u2019s Starlink satellite service to provide internet in rural areas.<\/p>\n