Linamar CEO urges end to 'illogical' metals tariffs
The head of Canada’s second-largest auto parts maker said she is worried no one is talking about the impact of “illogical” metals tariffs right now, even though they are affecting North American companies significantly.
“It is completely illogical that we have a free a trade agreement between our countries, but we are charging duties and tariffs. That does not make sense,” Linamar Corp. Chief Executive Linda Hasenfratz, who was named Canada’s Outstanding CEO of the year in 2018, said in an interview with Jon Erlichman.
“The impact, largely on American companies, is actually quite significant,” she added, pointing to auto giants like General Motors Co. and Ford Motor Co., which have both said the tariffs have undercut profits.
“My worry is no one is thinking or talking about it right now,” Hasenfratz said. “But that pain continues and continues to build, and it won’t be long before the industry can’t withstand those costs any longer and price increases start to come through, and that will absolutely impact demand.”
U.S. President Donald Trump cited national security concerns to justify tariffs of 10 per cent on aluminum and 25 per cent on steel last spring, leading to a dollar-for-dollar retaliation by Canada that took effect in July.
Prime Minister Justin Trudeau said in November Canada may still ratify the new trade agreement – which still needs to be signed off by all three countries’ lawmakers – even if Trump doesn’t lift the metals tariffs.
“The idea that there is some kind of security issue is ludicrous – so let’s eliminate the tariffs in the interest of economic growth and prosperity of companies within North America, which creates more investment and creates more jobs,” Hasenfratz said.
Hasenfratz added she sees the removal of the metals tariffs as a more urgent priority than the ratification of the new free trade agreement.
“It’s just as easy to take the tariffs off as it was to put them on – one signature,” she said.
“The tariffs we need eliminated immediately. If it takes a little longer for USMCA to get ratified, I think we can manage through that because we’ve got an agreement. And I think there’s not the same level of uncertainty that there was a year ago when we didn’t even have an agreement and people didn’t know where things were going.”
Outstanding CEO of the Year special coverage will air Wednesday, Feb. 6 at 7:30 p.m. ET./4:30 p.m. PT on BNN Bloomberg.