In the meantime, an urge to domesticate production beyond a basic level and switch off the finished goods – a struggle for Canadian firms for the reason that Confederation – would take time, investments and possibly state support.
“While the steel can be produced in Canada, he has to go to the USA to be transformed into a structural element that is then used when building a building in Canada,” said Jesus Ballesteros, head of the production industry for the consulting company BDO Canada.
“Raw aluminum is sent to the USA, it is processed in leaves or possibly even in finished doses, and then these cans are returned to Canada to use for beer or other drinks,” he continued. “Here we are caught in the tariffs … Can the Canadian industry go in this direction?”
Canada’s huge geography, smaller population also represents challenges
The limited flexibility of the availability chain goes far beyond the production lines and blast furnaces of the heavy industry. Canada’s huge geography and small population in comparison with the United States are hurdles for firms that need to strengthen their domestic market, while most countries beyond the United States seem unreachable for a lot of players.
“If we do not deliver to the states, we are a kind of island. Things have to take long trips from Canada to reach customers who are not in North America,” said Paschen.
Companies will deteriorate to vary their supply chains significantly, unless they consider that strong tariffs are here in the long term, he said.
Some experts have called for a relocation of the economic swaths, e.g.
“Subsidies will probably not reduce it,” said Stuart Trew, director of the industrial and investment research project on the Canadian Center for Policy alternatives. “Sometimes an additional coordination is like a state role in which you decide which types of steel you play and for which purposes, for example.”
