Juno News - Canadian businesses brace for impact of U.S. tariffs

00:00:00.000 Well, thousands of Canadian businesses are bracing for impact once the latest Trump tariffs come

00:00:11.740 into effect, January the 1st. Among them are businesses in the auto sector. Anthony Russo

00:00:17.500 owns Canadian Auto Liquidators, which focuses on buying vehicles from across Canada, which are then

00:00:24.540 sold in the United States. And Anthony Russo is our guest today, comes to us from beautiful

00:00:29.920 Kelowna, British Columbia. Welcome. Thanks, Mark. Great to join you today.

00:00:34.240 Okay. So talk to us about the impact of the economic impact of these tariffs once they hit.

00:00:41.560 What are you expecting to see? Yeah, it's been a very challenging season ever since the tariffs

00:00:47.700 came into play. So the first and primary effect that's happened to our business is just strictly

00:00:53.120 on compliance. So pre-tariffs, we were operating under Kuzma and under Kuzma, the auto sector was

00:00:59.640 essentially tariff-free. So we had this free trade sector where the majority of vehicles that were

00:01:04.920 actually available on the new and pre-owned side here in Canada would be eligible to be exported

00:01:10.300 and titled into the United States. As soon as the tariffs came out at that 25% level, it really cut

00:01:17.420 probably about three quarters of our eligible product. And we technically could be sending down

00:01:23.480 some of that inventory. However, the reason it's restricted it is that 25% level has just made it

00:01:29.600 non-sustainable. And just to give an example of that, if you were looking at a $100,000 vehicle

00:01:35.120 that formerly would have been exempt of tariffs, now to send that vehicle across the border,

00:01:40.180 you'd be looking at a $25,000 tariff. And so we've really dropped our inventory levels.

00:01:45.900 We've had to scale back on overhead. We've seen deep seven figures losses. And just to magnify

00:01:52.300 this issue, tariffs really came in right after the COVID market correction. So we had that

00:01:58.480 inflation from the supply chain disruptions during COVID where auto prices went extremely high.

00:02:05.180 You know, we had that adjustment where pricing came back down. And then now that we're regulating

00:02:09.380 in that lower price level, all of a sudden here comes tariffs. So it's almost like a double whammy.

00:02:14.660 We had to correct from the COVID pricing and then adjust to restricted inventory levels.

00:02:19.980 And it's been extremely difficult. There's talk of retaliation against the Americans,

00:02:25.420 Certainly, premiers like Ford and your own Premier Eby want to hit back as hard as we can.

00:02:32.420 How do you see that working out, if at all?

00:02:36.660 Well, I think that what we need to focus on in Canada, at least from my perspective, just on the auto sector, is some consistency.

00:02:43.740 So to give a little bit of context to what's happened in auto trade and our counter tariffs that we already put in,

00:02:50.400 And when the United States came out and said, OK, we're going to be moving forward with tariffs on the auto sector for Canada, Mark Carney and the Liberal government came out and said, OK, well, what we're going to do is we're going to respond with counter tariffs.

00:03:03.180 And so they launched Section 232 counter tariffs on the auto sector. And at face value, that sounds pretty justified. It makes a lot of sense. Hey, if you're going to tariff our cars, we're going to tariff your cars coming up.

00:03:14.580 However, what happened next basically depleted the entire defense of that program, and this is what most Canadians aren't aware of. When you actually get into Section 232 of the auto tariffs, after the Liberal government announced that, they met with the manufacturers here in Canada and carved out a quota system.

00:03:32.180 So basically, here's what's happening right now. When we have a Kuzma compliant vehicle that's manufactured and completed in Canada, and it gets sent across the border to the United States to be titled, that vehicle is hit with a 25% tariff.

00:03:47.400 However, when a new Ford, for example, is completed in Michigan and it gets shipped into Canada to be eligible to sell here, we're currently actually operating with zero tariffs under our quota system.

00:04:00.000 And here's the caveat to that that's also quite interesting. The Liberal government has never

00:04:05.160 publicized the actual amount that this quota operates under. However, for those of us that

00:04:11.040 operate in the system, we're fully aware that it's the vast majority, if not all, completed American

00:04:16.480 vehicles that are coming into Canada that are exempt of tariff. So basically what we've done

00:04:22.260 to the auto sector is we have absolutely been hammered, especially on the manufacturing side.

00:04:28.000 That's why you're seeing a lot of damage right now in Ontario. And it sounded really positive,

00:04:32.640 like we were going to fight as Canadians to defend these jobs, to defend our manufacturing

00:04:37.120 sector. However, when it actually came time to implement that defense, there was no follow

00:04:42.740 through. So it was almost just a PR stunt because it's less than about 1% of the units coming up

00:04:49.060 from the United States into Canada that would actually get hit by a tariff. So from my

00:04:54.360 perspective, there's a lot of politicization of this entire tariff sector and this entire tariff

00:05:01.320 system. However, what we're not doing is we're not actually being consistent. So what I would like to

00:05:06.120 see is if we're going to announce countermeasures and counter tariffs, that we don't do that for a

00:05:12.840 PR stunt and then back down on implementation. From my perspective, we need to fight to protect

00:05:18.560 the Canadian manufacturing sector and our jobs, and we are not doing that right now.

00:05:23.100 So you're saying follow through, don't just make threats, make sure we follow through with our retaliatory tariffs.

00:05:30.520 That's what you're saying. Is that correct?

00:05:31.840 That's exactly what I'm saying. And quite frankly, I think that tactics like this make us appear incredibly weak to the Donald Trump administration.

00:05:40.380 I mean, if you were to read The Art of the Deal, even what we just saw happen here, one of the sections in his book, The Art of the Deal,

00:05:46.220 It talks about making a last minute change to a deal at the 11th hour so that the other side is basically forced to sign.

00:05:53.820 I mean, this is all about leverage.

00:05:56.180 And again, from my perspective, just on the auto sector here, we've handed all of our leverage over to the Americans and we don't have a lot to pull back on.

00:06:06.440 And, you know, again, I know there might be some disagreement with my perspective here.

00:06:09.580 I do believe we need actual real counter tariffs because at some point we have to have some

00:06:14.720 leverage other than just reliance on China. And we're going into a time where Donald Trump is

00:06:20.540 heading towards the midterms. And one of the unions that he is going to need very specific

00:06:25.700 support from in the midterm elections is going to be the United Auto Workers, the UAW. And if you

00:06:31.380 would remember, it was about a year ago where the UAW were in a massive strike and it took quite a

00:06:36.280 of time to actually come to a deal with the UAW and so far under the American side tariffs the UAW

00:06:43.880 have been quite supportive of Trump because these tariffs essentially protect the U.S. manufacturing

00:06:49.720 jobs. Now if Canada were to respond with counter tariffs it would put very precise pressure on the

00:06:57.320 UAW for one reason. There are plants in places like Michigan where there are completed vehicles

00:07:03.640 that are primarily going to Canada.

00:07:05.520 It's about 7% of all American manufactured vehicles

00:07:08.320 that actually go to Canada.

00:07:09.740 So we wouldn't be crippling them

00:07:11.240 by putting on countermeasures.

00:07:13.080 But what we would do is we would put very precise pressure

00:07:16.480 on a union where Trump needs that support.

00:07:19.000 And at this particular point,

00:07:20.440 I feel like we have to do something.

00:07:22.360 We can't allow all of our manufacturing jobs

00:07:25.020 and all of these corporations to move south of the border.

00:07:28.340 Mind you, those cars could be sold to the United States,

00:07:30.880 especially if they're not importing as many from us.

00:07:33.640 right? So in other words, rather than ship those cars north to Canada, where they would be subject

00:07:41.420 to tariffs, they would be sold in the United States, which would not be importing Canadian

00:07:47.500 vehicles into their country. At least that's what it appeared to me. And I don't know what the

00:07:51.500 numbers are. You're the expert in that regard. But then you also have, I mean, in Canada, we also have

00:07:57.820 some pushback as far as retaliation goes from Premier Smith. I have not heard from Premier Mo

00:08:03.800 yet. I know a Premier EB stands. You'd expect that from somebody on the left wing of the political

00:08:09.900 spectrum. But I mean, what Smith is saying is this is going to end up hurting us. Putting these

00:08:16.180 tariffs on the American products coming in are going to be paid for by Canadians. That's been

00:08:22.620 counter-argument to their tariffs against us, which is to say, well, it's Americans who are

00:08:27.820 going to be paying the price as a result of these tariffs. And then what do we do? We retaliate by

00:08:32.820 raising our own tariffs on them. And of course, there are products that we buy from the United

00:08:39.540 States, parts, some other products, many other products, agricultural products, for instance,

00:08:46.620 we bring them into our country, and that's going to add costs along our supply chains up in this

00:08:53.000 country. So the other thing is that I would throw that at you on this. I mean, knowing Trump,

00:08:59.620 if we retaliate, that's going to make it less likely that he's going to return to the bargaining

00:09:05.260 table, I think. Some people say, oh, no, it'll force him to get back to the bargaining table.

00:09:10.200 but that's not the history of this guy. You know, he hits back against those who retaliate.

00:09:16.420 You know, he will retaliate. Then he'll say, okay, well, I'll raise it up to 100%. You know,

00:09:20.840 this just goes back and forth. So I don't know, part of me thinks that maybe the best thing to do

00:09:26.440 is just keep a level head here. We haven't been hit with those tariffs yet. You know, we still

00:09:31.040 have a number of months to go. It's supposed to take effect January the 1st. Rather than go in

00:09:36.380 and vow retaliation, shouldn't we be trying to get back to the bargaining table with his team?

00:09:44.500 So my counter to that, I would disagree. Now, I would disagree with some nuance because I also

00:09:49.700 don't agree with Premier Ford or Premier Eby. I think that some of the actions that Premier Ford

00:09:55.360 has done have just magnified our issues. And I also, again, would say that there's a lot of

00:10:00.040 reality to the fact that our leveraging ourselves so closely to China has probably magnified this

00:10:05.520 issue. I really do believe there's a lot of truth to that. However, at this particular point, if we

00:10:11.000 are going to negotiate a deal, if we're going to negotiate at least a somewhat equitable deal for

00:10:16.400 trade, we have to have some leverage. And again, we have essentially handed over all of that leverage

00:10:23.140 to the United States. And what we can't afford, Mark, we can't afford to wait this out and not

00:10:29.340 put any countermeasures on if the cost is we're going to lose Stellantis, we're going to lose

00:10:34.820 Ford, we're going to lose General Motors. So at a certain point, when we're seeing that we're

00:10:39.560 currently right now, and this has been going on since Justin Trudeau, we've been in a capital

00:10:43.960 flight perspective as Canadians. Under Stephen Harper, for every $1 that was invested into Canada,

00:10:51.500 $1 was invested out. So we were at a complete level perspective as far as international

00:10:56.600 investment went. Currently, and this is including the first quarter of 2026, under Mark Carney,

00:11:02.420 for every $1 that's invested into Canada, $1.89 is invested abroad. And the majority of that

00:11:09.800 investment is going into the United States. So at a certain point, we need to stop and evaluate

00:11:15.180 where we're at. We're losing manufacturing jobs. And it's common sense. If these corporations

00:11:20.240 can retool and move down south, and this is exactly what Donald Trump is after,

00:11:25.140 if they can retool and move down south and be exempt of the tariffs, of course, they're going

00:11:30.120 to do that so at some point we have to fight to protect these jobs and i think personally that

00:11:37.140 just standing on the sidelines doing nothing and hoping that hey let's just promise a little extra

00:11:42.440 oil and a little extra energy i don't think that that's realistic at all at some point we actually

00:11:48.320 have to fight to defend these jobs that would be my perspective i understand that i mean we could

00:11:53.020 fight all we want at the end of the day i mean toyota and honda are gonna do the math and realize

00:11:58.520 that they really should be moving south.

00:12:02.540 And other Canadian companies have already done that.

00:12:05.400 What do you think the overall impact on companies like yours will be

00:12:09.660 once those tariffs come into effect?

00:12:12.300 Yeah, a lot of us are already paying this price.

00:12:14.660 And a lot of companies, and I think this is through many different industries

00:12:17.440 and resources right now because of tariffs.

00:12:19.040 I mean, softwood lumber is just getting decimated.

00:12:21.060 But when we take a look at the actual cost,

00:12:23.460 a lot of us are already paying a massive price.

00:12:25.640 We're taking huge losses.

00:12:27.260 Our margins are lower.

00:12:28.180 our eligible product is lower it's extremely difficult to navigate and this is why again at

00:12:33.420 some point it's going to be brutal and it's going to be very difficult we're already basically

00:12:38.160 slowly bleeding out so if it's going to be difficult my perspective would be that the

00:12:42.580 government is going to need to come in with close to a covid level relief package to allow us to

00:12:48.540 maintain some of these jobs I mean take a look at all the mills that are closing down right now you

00:12:52.640 have 400 jobs that are closing down on the coast from mills that are going under at some point

00:12:56.860 we're going to need to put a relief package in and just be honest with Canadians and say

00:13:00.060 it's already difficult. It's going to be brutal. But if we don't do any countermeasures, we may

00:13:06.320 permanently lose some of these spaces. And that would be unacceptable. Now, you're asking for

00:13:12.480 specifics. What would happen if Canada were truly to do what they kind of PR said that they were

00:13:18.480 doing? So let's say that they were to amend Section 232 on the counter tariffs for the auto

00:13:24.040 sector what would happen immediately if we were to go dollar for dollar it would basically cause

00:13:29.320 for example every ford dealer in canada to almost run out of product within about two to three

00:13:34.860 months because at a 25 tariff coming in ford will halt shipping so for example an f-150 plant in

00:13:42.400 michigan will not send completed f-150s into canada under a 25 tariff so it would do a micro

00:13:50.080 version of what happened during COVID where there would be a disruption to our supply chain there

00:13:55.640 would be a disruption in our manufacturing process we would be very tight on particular products

00:14:01.000 the only nuance and difference to this scenario is that it would be for domestic products coming

00:14:06.500 out of the United States so it wouldn't have any effect on Japanese and Korean vehicles German

00:14:11.620 vehicles that are coming exempt of tariff so it would be extremely brutal and it would require

00:14:17.000 massive relief but at this point we're just getting hammered on the canadian side and we're

00:14:22.020 losing the manufacturing space yeah i mean this is going to get ugly and unfortunately now we're

00:14:30.080 really really have our backs up against the wall uh in dealing with with president trump he's

00:14:36.460 adamant about you know bringing back jobs and repatriating manufacturing jobs and to your point

00:14:42.980 earlier about unions, that's what they want to see. And so for those on this side of the border

00:14:48.760 who think, oh, great, he's going to get slaughtered in the midterms. And all those people in places

00:14:55.260 like Michigan and Illinois and all these other states are going to vote for somebody else other

00:15:01.000 than the Republicans. But they like these. I mean, that's one of the reasons why the Democrats lost

00:15:09.480 in the last presidential election

00:15:11.580 is because Trump repatriated all those votes,

00:15:15.060 brought back a lot of those working-class unionized votes.

00:15:17.800 That's who he's catering to.

00:15:19.200 He's catering to those people.

00:15:22.120 And I think a lot of Canadians

00:15:23.680 at least need to understand what he's doing

00:15:26.500 and why he's doing it.

00:15:27.780 But I'm not sure that's the case.

00:15:29.400 I think a lot of Canadians are so consumed

00:15:31.940 with Trump derangement syndrome 0.98

00:15:33.960 that they just think he's insane.

00:15:35.720 but in fact he quietly has the backing of these unions down there anyway thank you so much for

00:15:43.200 coming on the show did you want to pipe in yeah one last thing i'll say i agree with you mark i

00:15:47.240 think that uh trump derangement system causes people to think that everything he's doing is 0.98

00:15:51.400 essentially idiotic and nothing could be further from the truth in this trade negotiation we're 0.98

00:15:55.460 getting raked over the coals that's absolutely reality and it's going to be very very difficult 0.99

00:15:59.500 to come to the table i would suggest that canada would respond with one other thing i think that

00:16:03.680 immediately we're heading into economic crisis. Parliament should be recalled and we need to

00:16:08.480 assess some of our countermeasures to ensure that they have common sense because there's another

00:16:12.120 piece to this that's so unbelievably frustrated as somebody in the auto sector and it's something

00:16:16.320 like this. Melanie Jolie's plan to provide relief for the auto manufacturing sector was to put 1.00

00:16:22.300 forward an EV rebate. Now the problem with the federal EV rebate is when you actually assess

00:16:27.860 where the EVs are coming from that are sold in Canada. It's the Dodge Charger that's from start

00:16:32.800 to finish essentially completed here in Canada. It's a very poor seller. The vast majority of EVs

00:16:38.720 that are being purchased in Canada are manufactured outside of Canada with a large portion coming from

00:16:43.720 the United States of America. So it's policies like this where we go to protect Canadian

00:16:49.540 manufacturing. We are going to give a rebate to Canadians to buy American goods. That is void of

00:16:56.500 common sense and that is where we need to recall Parliament and recognize that we're in economic

00:17:00.800 crisis. Anthony, thank you so much for coming on the show. Great to chat with you today.

00:17:05.580 Thanks, Mark. Pleasure to join you.

Juno News - August 29, 2026

Canadian businesses brace for impact of U.S. tariffs

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