TORONTO—Canadian automotive parts are next on Trump’s tariff list. The U.S. could introduce up to a 25% duty on automotive parts made in Canada. The problem is that over 75% of the parts are either directly exported to the U.S. or end up in the Canadian-assembled cars destined to the south of the border. The tariff, if introduced, could be a death sentence to the Canadian automotive industry.
But let’s not surrender without a fight. Here are the practical measures you can take today to make Trump’s threats irrelevant to your automotive parts business or reduce the damage if it is already impacted.
1. Answer the question “Why should the global automotive OEMs, Tier 1 or Tier 2 suppliers buy the parts you make?” Perhaps you have unique capabilities or tools or have developed expertise in certain materials or manufacturing processes. In other words, you must articulate your unique competitive advantage.
Then, list all potential non-automotive applications of your unique competitive advantage, assets, equipment or tools. For example, can you make retail store fixtures or agricultural machinery parts or mining tools using the same equipment?
2. Request meetings or calls with government organizations in charge of export business development, and discuss your unique competitive advantage with them, as well as its applications and your business goals. Then, request recommendations for the global automotive and non-automotive markets that are the most appropriate for you and how to enter them (integrate to the automotive and non-automotive supply chains).
- Trade Commissioner Service, select your province and check the box “Automotive” to find the contacts of the automotive trade commissioner in your province.
- Provincial Government international development officers. For example, in Ontario it is the Ministry of Economic Development, Job Creation and Trade that employs automotive industry and international development officers. Contact the Ministry now.
- Export Development Canada has invested in many international companies, including automotive companies, in exchange for them buying goods and services from Canadian suppliers. The list of the companies and EDC contacts are available here.
3. Contact the Automotive Parts Manufacturers Association (APMA), and connect to the people in charge of international marketing initiatives. APMA frequently organizes Canadian pavilions at the international automotive trade shows, incoming and outgoing trade missions and business matchmaking for automotive parts manufacturers. Request the list of the relevant trade shows and events where you can maximize the chance of getting new business by demonstrating your unique competitive advantage.
If your non-automotive application includes mining supplies, get in touch with Mining Suppliers Trade Association (MSTA) which has a similar program for mining suppliers. Look for similar programs with other industry associations for other applications.
4. Register on the procurement lists and portals of the relevant OEMs and Tier 1 suppliers. Most of them do have procurement portals and regularly invite the suppliers to bid on the programs and jobs. It takes time to register but it is worth it. You should also consider independent procurement portals such as OMX or Source Ontario Suppliers Directory.
5. Register for a free webinar “Diversify or Die” designed specifically for automotive parts manufacturers and those affected by the raised steel and aluminum tariffs. The webinar will be conducted on July 24 at 1 p.m. You will learn more about practical tools you can apply right now to save your business from the destructive impact of the next wave of Trump’s tariffs. Register now for the Free Webinar, or Book a One-on-One Call to go over the tools to save your Canadian business if you are not available at the time of the webinar.
For more helpful information on exporting, visit ExportEdge, an essential tool for all Canadian companies interested in exploring business opportunities in international markets.