Invest in Hamilton

On April 2, 2025, the American administration leveraged the International Emergency Economic Powers Act of 1977 to introduce a 10% tariff on all countries effective April 5, 2025. Individual countries perceived to have greater trade imbalances with the United States will then be subject to larger tariffs, which are slated to take effect on April 9, 2025.

The CBC has prepared a list of countries impacted by these additional tariffs at this link.

Notable tariffs include a 34% tariff on goods from China (raised to 54% when combined with past tariffs), a 26% tariff on goods from India, a 25% tariff on goods from South Korea, and a 24% tariff on goods from Japan.

Canada and Mexico were not subject to either the 10% tariff or the additional trade imbalance tariffs. Instead, Canada and Mexico continue to be subject the original “fentanyl/migration IEEPA orders” of 0% tariffs on CUSMA complaint goods and a 25% tariff on non-CUSMA compliant goods.

Following this announcement, on April 3, 2025, the United States’ previously paused 25% tariff on foreign-made automobiles came into effect. While these tariffs do not stack with the reciprocal tariffs announced on April 2^nd, they do stack on top of previously announced steel and aluminum tariffs.

In response, the Government of Canada announced a 25% tariff on vehicles imported from the United States that are not CUSMA-compliant and on the non-Canadian content of CUSMA-compliant vehicles imported from the United States. The Prime Minister further noted that Canada is preparing a framework for automakers to receive tariff relief so long as their production and investment remain in Canada.

Recognizing the rapid pace at which tariff policy has changed in recent months, the next major milestone appears to be May 3, 2025. On that day, the United States is expected to expand tariffs to automobile parts. A report from the Conference Board of Canada projects that a single quarter of automotive tariffs could reduce automobile and parts exports from Canada by more than half.

Attempts to measure the local impact of these and other changes is difficult. However, there are some recent insights.

To begin, Hamilton Economic Development’s research indicates that there are approximately 1,860 local jobs in motor vehicle parts manufacturing. These jobs represent approximately 6.6% of total manufacturing jobs in the city. An estimated 14 firms within Hamilton operate within this industry, with five of those firms employing between 100 and 499 employees. Additional data from Lightcast.io estimates that the local export value (combined foreign and domestic) of goods and services produced in the vehicle parts manufacturing sector is approximately $855,994,498 – based on 2022 input/output data from Statistics Canada.

The Conference Board of Canada also released its estimates on the cost of U.S. tariffs on Canadian cities. This modelling, which is based on 3 months of tariffs in the second quarter of 2025, and assumes 25% tariffs on all non-energy exports into the United States, shows Hamilton as having the fourth largest GDP decline among Canadian census metropolitan areas. Specifically, this model forecasts a 1.6% decline in regional GDP.

A suite of programs and services are available to provide support to Canadian businesses during this time.

• On April 15, 2025, Innovation Factory is hosting a discussion with Sue Rauth of the Federal Trade Commissioner Service on navigating the impacts of U.S. tariffs. Registration is available through this link.
• Export Development Canada’s Trade Impact Program is mobilizing $5 billion over two years to help exporters reach new markets for Canadian products.
• Business Development Bank of Canada is making $500 million in favourably priced loans available to support impacted businesses in sectors directly targeted by tariffs and companies in their supply chains.
• $1 billion in new financing is available through Farm Credit Canada to reduce financial barriers for the Canadian agriculture and food industry.
• Temporary flexibilities have been added to the Employment Insurance Work Sharing Program, which helps avoid layoffs when there is a temporary decrease in business activity.
• The Canada Small Business Financing Program is offering a maximum loan of $1.15 million to small businesses and start-ups in Canada with revenue of less than $10 million.

And most relevant for Hamilton’s manufacturing sector, the Government of Canada has created a tariff remission request program to provide support on Canadian counter tariffs where a manufacturing company can not source inputs through domestic markets.

For companies seeking to diversify their trade relationships, consider meeting with a member of the Federal Trade Commissioner Service. The Trade Commissioner Service can help Canadian companies access Canada’s 15 free trade agreements with 51 countries worldwide. As is ever the case, please feel free to connect with Economic Development staff, who can offer a first point of introduction to the Trade Commissioner Service.