Difficult times for truck and bus manufacturers due to implementation of new tariffs

As soon as the new list of tariffs on heavy trucks and buses comes into effect, Industry players say companies making these vehicles in Canada may be feeling the pain.

Starting today, a 25 percent duty will be imposed on all foreign imports of medium- and heavy-duty trucks and truck parts bound for the United States, and a 10 percent duty on buses. The new rules leave an exemption for trucks traded under the Canada-U.S.-Mexico agreement, however — the 25 percent tariff will apply only to their non-U.S. parts.

US President Donald Trump and his administration have justified these tariffs by arguing that relying on imported trucks, parts and buses poses a national security risk.

“We need our truck drivers to be economically healthy and strong, for many reasons, but most of all, for national security purposes!” Trump said in a satya social post That’s when he announced the tariffs in September (which he initially said would go into effect on October 1).

The move means tough times for truck makers Trade vehicles and parts between Canada and the U.S. — like Edison Motors in Golden, B.C., whose president and founder Chase Barber called the new tariffs a “dish.”Earning.”

“It would be very difficult to sell in the US right now,” Barber told CBC News. He says a handful of his shipments will be affected by these tariffs, which could add more than $100,000 to the cost of the finished heavy-duty semi trucks he builds and sells.

“We can’t eat that cost; it has to go to the customer. If we eat the tariffs we’ll sell the trucks for free or give away the money.”

The trucking industry is already in trouble

Compared to other industries, heavy truck and bus production in Canada is a small sector. According to Canadian government data, in 2024, Canada will export about $5 billion worth of trucks to the US, and import just under $9 billion worth of trucks.

But Dennis Darby, president and CEO of Canadian Manufacturers and Exporters, says the losses still mean a lot to the nearly 20,000 people employed in the sector across the country.

“It’s not the same scale as the auto industry … but it has an impact in cities across the country,” Darby said.

Companies like Packer, which makes large trucks in Quebec, have already announced layoffs – 175 jobs were cut in JulyAnd other 300 The announcement was made earlier this month.

“This … is very stressful for our members and their families,” said Daniel Cloutier, Quebec director of Unifor, which represents workers at Packer’s plant in Sainte-Thérèse, Que. “There’s nothing at the moment that gives us the slightest hope. We just keep our fingers crossed.”

Packer did not respond to CBC News’ request for comment at the time of publication.

Spokesperson for bus manufacturer Prevost The company said nOT anticipates no “immediate changes” to production but will continue to assess the tariff impact, while New Flyer also said it is “carefully reviewing” the new tariffs.

According to Cyble Ray, a professor of supply chain management at McGill University, the tariffs already in place on steel and aluminum – raw materials used to make many vehicle parts – will add another tariff layer impacting the sector.

Ray points out that small manufacturing industries such as truck production may be harmed more than larger Canadian industries as a result of tariffs. According to Ray, if a factory is making fewer trucks, but its overhead costs do not change, that means each truck will be more expensive to make at that factory. He worries that some companies may eventually have to close shop in Canada, particularly Quebec, where truck and bus production is substantial.

“These tariffs and related problems could be a death knell for some small industries,” Ray said. Said. “This is very worrying for long-term manufacturing in Quebec.”

Because Canada needs trucks to transport things within the country, Ray says a “Buy Canadian” campaign could help boost domestic truck and bus manufacturing.

Barber has the same hope at Edison Motors. Noting that many of Canada’s resource-based industries, such as forestry and oil, require heavy equipment, he says he is “100 per cent confident” there is a market in Canada for the kind of trucks his company makes.

“We have to rethink the way we do business,” he said. “Whereas we were looking at the entire North American market, I think now is the time that we need to look at just the Canadian market.”