Escalating U.S. - Canada tariff battle impacting Michigan auto executives and small business owners

DETROIT (FOX 2) - The latest trade war escalation between the U.S. and Canada has auto executives and small business owners alike on edge, making contingency plans just to survive. 

All of this follows the collapse of high-stakes trade talks which prompted the White House to launch aggressive new tariffs of up to 50% on Canadian imports.

Michigan impact of US and Canada tariff disputes

Local perspective:

Michael Howard has owned Howard Family Designs in Warren for about ten years. He runs the business out of his house and has a heavy reliance on lumber imported from Canada. Under Section 232 of the emergency trade measures, imported Canadian softwood lumber and finished wooden furniture will see taxes climb as high as 50%. Raw materials like Canadian maple, birch, and dimensional softwood have skyrocketed in price. 

That will be a huge hit for a small business already making major pivots.

"We’ve had to unfortunately let one of our guys go," said owner Michael Howard. "We helped him find a stable job so he’s doing well, but he’s no longer in our shop, and he was with us for many, many years. We’ve lost clients already because of the increase the cost we were planning to do a medical facility build out this month the end of August, early September, and just one project with Dylan was going to net us $3000, and now we’re going to lose that, plus all the other projects that we’re going to do with them, so this is directly negatively impacting our ability to provide for our family and our business really focus on giving back to our community and helping those in need, and it impacts our ability to even do that."

From small businesses to major corporations and suppliers, particularly in the auto industry, experts say there’s a war room-like atmosphere likely going on as the tariff and trade debate seemingly changes by the hour. 

Dig deeper:

The federal government is maintaining steep tariffs on foreign metals, including a 25% baseline on aluminum and steel imports. The Trump Administration is also signaling that truck and auto tariffs from Canada could surge to 50% by the start of next year. I asked a former auto supply chain executive what current car bosses are likely to do right now.

"It’s not only your direct suppliers, but it’s their suppliers and their suppliers and their suppliers, so they would be a real focus right now and probably a war room set up or a task force to understand the impact of these tariffs and then the what-if scenarios so what if the 50% comes in January, we hear the threat about another 50% coming in January, what if that happens what does that look like," said former auto supplier executive Jan Griffiths.

Meantime, many business leaders are trying to figure out just how much of those cost increases they can eat and how much to pass along to the customer.