The imposition of new tariffs on Canadian goods by the United States is creating significant economic challenges for companies like AI Industries, a steel fabricating plant located in western Canada. With the trade between the US and Canada nearing $800 billion annually, these tariffs threaten to disrupt the strong economic ties between the two nations. AI Industries, which relies heavily on the US market, is bracing for the impact as up to 90% of their shipments are American-bound.
AI Industries' brand manager, Darryl Lamb, expressed concerns that the company's business model in the US is now at risk. The new tariffs, which stand at 25% for Canadian and Mexican goods and 20% for Chinese goods, could lead to a loss of many American customers for the company. Faced with this challenge, Lamb is actively seeking to remove American products from the shelves and explore alternative markets for their products.
Karim Walji, CEO of AI Industries, shares the sentiment of uncertainty. He is certain that the company will lose business due to these tariffs. With 75% of AI Industries' work being US-based, the potential loss is significant. This situation might force the company to downsize its workforce, which currently stands at 100 employees, or even replace costly machinery, some of which are priced between $400,000 and nearly $1 million.
“He wants to show that the US is strong and, ‘Because I am bigger than you are, I can bully you around, and this is how I am going to do it,’” – Karim Walji
The tariffs not only threaten the company's operations but also have broader implications for Canadian-American trade relations. AI Industries' CEO believes that American families will ultimately bear the cost of these trade policies. The company's customers, many of whom are passionate about these issues, are taking a stand against the tariffs, highlighting the growing discontent among stakeholders.
“There are a lot of people that are passionate,” – Darryl Lamb
The imposition of these tariffs has been a wake-up call for Canadians, emphasizing the need for diversification in trade relationships. Peter Xotta, an industry expert, noted that the economic activity in Canada is heavily reliant on north-south trade with the United States.
“The economic activity here is very dependent on north-south trade,” – Peter Xotta
As AI Industries navigates these turbulent times, they must explore alternative markets and strategies to sustain their business. Darryl Lamb is actively working on finding these new avenues for their products. However, the challenge remains formidable as the company adjusts to this new economic reality.
