The 25% tariffs announced last night by U.S. President Trump will devastate a trucking industry already suffering from the worst freight economy in 40 years.
That, from the Canadian Trucking Alliance (CTA), which has for some time been warning of the disastrous effects a trade war with the U.S. would have on the trucking industry.
“Widespread tariffs on our customers’ freight to U.S. suppliers and consumers will have shocking effects on our membership and the overall supply chain. The longer these tariffs are applied, the more strain there will be on carriers, which will lead to jobs losses and permanent closures of fleets,” said Stephen Laskowski, CEO and president, CTA.
In recent fleet surveys conducted by various trucking associations, carriers across Canada report that customers already began cancelling orders in the weeks leading up to the tariffs, varying between 20% and 80% at some businesses in certain provinces.
It claims fleets have already begun laying off employees. Private fleets are also anxious about the effect of tariffs, according to Mike Millian, president of the Private Motor Truck Council of Canada (PMTC).
Tariffs unjustified
“The unjustified tariffs being imposed on Canada by U.S. President Trump will have severe consequences on both the Canadian and U.S. economies and will hurt both populations as it will send consumer prices upwards, costing citizens on both sides of the border, making lives more expensive,” he said in a statement to TruckNews.com.
“This will cost jobs to Canadians, and will see a slowdown in cross-border trade, affecting nearly 120,000 Canadian drivers and their companies who cross the U.S. border regularly. Although it will hurt, we agree with the Canadian response with counter-tariffs. We can not sit by and not respond when the U.S. administration chooses to ignore bargained free trade agreements and damage both our economies.”
The CTA is calling on the feds to do the following: Immediately remove the carbon tax; remove or reduce the excise tax on diesel; develop a trucking tax relief program; increase the on-road meal allowance deductibility to 100% for truck drivers facing reduced demand for their services; and ensure any relief packages will only extend to drivers on payroll, or independent contractors who’ve voluntarily opted into EI.
“We need an immediately short-term relief package that starts with such tax measures, but we also need long-term planning to improve our productivity and efficiency,” says Laskowski. “The trucking interprovincial trade barrier pilot is an excellent start, but with the imposition of tariffs, we need to expediate all solutions to improving the productivity and competitiveness of our sector right now.”
ATA reacts
The American Trucking Associations (ATA) also took a stand against the tariffs. In a statement, the association said while it supports a crackdown on illegal drugs crossing the border, “As we work to make our communities stronger and safer, we must also avoid unintended consequences that could exacerbate another one of Americans’ top concerns: the high prices for goods and groceries.”
CEO Chris Spear continued: “With the success of USMCA and the growing trend of nearshoring, the North American supply chain has become highly integrated and supports millions of jobs. Imposing border taxes on our two largest and most important trading partners will undo this progress and raise costs for consumers. The 100,000 full-time hardworking truckers hauling 85% of the surface trade in goods with Mexico and 67% of the goods traded with Canada will bear a direct and disproportionate impact. Not only will tariffs reduce cross-border freight, but they will also increase operational costs. The price tag of a new truck could rise by up to US$35,000, amounting to a US$2 billion annual tax and putting new equipment out of reach for small carriers.”
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