Ottawa needs to review Canada's tax reform: Linamar CEO
The chief executive of Canada’s second-largest auto parts maker is calling Donald Trump’s renewed threat to impose tariffs on U.S. trading partners “crazy,” arguing additional levies would lead to a recession not only in North America but also globally.
“There is nothing great about tariffs,” Linamar CEO Linda Hasenfratz told BNN Bloomberg’s Amanda Lang Tuesday, after the U.S. president took to Twitter to threaten countries that treat the U.S. unfairly when it comes to trade with additional tariffs.“Tariffs ultimately hit the consumer – consumers end up paying more, consumers stop buying, and a recession is the result.”
“So for Trump to say tariffs are good is crazy,” Hasenfratz added. “If he imposes additional tariffs, and doesn’t take away the ones that he’s got in place, he will be personally instigating a recession in this continent and possibly beyond our shores as well.”
“And that he has nobody but himself to blame for.”
Hasenfratz also sounded the alarm on Trump’s threat to impose 25-per-cent tariffs on auto imports, which he proposed in May.
“I am hopeful we won’t see the tariffs imposed on auto tariffs simply because I think the impact of such would be absolutely disastrous from an economical perspective,” Hasenfratz said, noting the auto industry is highly integrated.
The U.S. Commerce Department held public hearings last week as it investigates whether duties should be applied to global auto imports. A loud chorus of voices, from industry groups, workers and foreign governments, has urged the Trump administration to stand down on auto tariffs.
Hasenfratz said the tariffs “would create enormous additional costs that no company, no automaker, no supplier could absorb.”
“So without doubt this would create a massive increase to prices of vehicles,” Hasenfratz added, noting estimates of price increases range between $5,000 and $9,000 per vehicle.
Hasenfratz said the rise in prices would deter people from buying cars, ultimately leading to a collapse in production levels and the auto industry as a whole.
“So it is my hope that the clear consequence of imposing these tariffs on auto parts being such a disastrous impact on the auto industry, and therefore, the overall economy, that the U.S. administration will not impose them,” Hasenfratz said.
“Because after all, [the U.S.] will be hurt more than anybody when the industry collapses, the recession begins, when people lose their jobs – Americans lose their jobs.”