Donald Trump as president of the United States. Well, where shall we begin.
I’ll skip the whole how-did-this-happen conversation and get right to the ramifications of his presidency on the Canadian automobile industry.
The fast answer is that we don’t know yet. It’s like trying to figure what to do right after Sept. 11, 2001.
If we take his boisterous campaign declarations at face value — keeping in mind that it’s campaigning and not policy setting — the most arrogant is the notion that he can somehow force businesses to move manufacturing to American turf from places such as Mexico. If those businesses — he has singled out Ford — don’t comply, they’ll face huge import taxes on their products when they cross into the United States.
That obviously sounded great to a whole lot of voters, but Trump will find out when he arrives in Washington that he can’t govern with a slogan or by threats. There’s a process to prevent being dictatorial, called government.
In this case, such a move would likely require re-opening the North American Free Trade Agreement (NAFTA) and, lo and behold, discovering that automakers actually sell cars all over the world. NAFTA is not a one-way trade deal that only siphons money out of the United States.
Of course Canadian industry is looking for some sign of stability or sense of direction right now, but perhaps the best way to get some sleep at night is to look at the history. The Canadian and U.S. auto industries have been tied together since the age of black-and-white TVs, certainly long before Mexico and China entered the picture as manufacturing bases simply because of cheap labour.
Canada doesn’t have cheap labour. It has unions and employment standards, so it would appear that the Great White North is not on Trump’s radar. In fact there might even be a move afoot to create a trade deal between Canada and the United States that excludes Mexico.
A story this month by Online Editor Greg Layson reports on how complicated it would be for the United States to simply quit NAFTA. It’s the first of many stories that Automotive News Canada will write, but it’s important to remember that Trump loves to shock people with his outrageous and exaggerated comments. He has been called a lot of things, but the fact is he has no track record and, from what we have seen of him during this campaign, absolutely no plan as yet.
In the meantime, the Canadian auto industry will rely on its brilliant minds to prepare for the future.