Life after NAFTA: Canadian businesses start to plan for bleak new trade reality
Companies starting to project more trade headaches into planning and assumptions
By Peter Armstrong, CBC News Posted: Nov 11, 2017 5:00 AM ET, Last Updated: Nov 11, 2017 5:00 AM ET, http://www.cbc.ca/news/busines...-armstrong-1.4393021
What a year. It was this week last year that Donald Trump's insurgent campaign won the U.S. presidency. Back then, officials and businesses seemed to shrug off Trump's very clear promise to tear up NAFTA.
Now, major Canadian manufacturers are running the numbers, trying to figure out what life would be like if Trump makes good on his threat and scraps the deal altogether.
Linamar, the second-largest auto parts manufacturer in the country, released weaker-than-expected quarterly results this week, although the lower profits were blamed on the string of hurricanes in August and September and not weaker demand or trade-related concerns.
Linamar CEO Linda Hassenfratz says they've run the numbers and considered what would happen if NAFTA was scrapped.
"And we feel pretty comfortable that from a personal company perspective, we're going to be OK either way," she told CBC's On The Money.
Linda Hassenfratz, second from left, was part of a roundtable in Washington, D.C., in February to form the Canada-U.S. Council for the Advancement of Women Entrepreneurs and Business Leaders. (Twitter)
That's all well and good for Linamar. It's looking past the United States already. About 80 per cent of the world's automotive market is outside North America. And more than half Linamar's new deals signed last year were in Europe. But there's a bigger issue at play and Hassenfratz knows it.
She runs one of the biggest manufacturing companies in Canada. She's one of the 13 members of the council advising the Canadian government on what to do with NAFTA. She has met with Trump in the Oval Office. So if anyone understands the broader stakes at play, it's she.
And whether Linamar would be OK or not, she says there would be incremental effects across a whole bunch of companies that would be negative for everyone. What's worse, Hassenfratz says this isn't being discussed in the U.S.
"We're talking about it a lot here in Canada," she says. "But typically in the U.S. [there is] very little media coverage for something that could fundamentally change their economy and that just doesn't make sense."
Add to the confusion some misdirection and misinformation from the Trump administration. Trump has repeatedly said NAFTA has been a terrible deal for U.S. workers — but millions of U.S. jobs actually rely on the trade deal — and that the U.S. has a trade deficit with Canada. The U.S. Trade Representative's own website says the U.S. goods and services trade surplus with Canada was $12.5 billion in 2016)
Hasenfratz of auto parts manufacturer Linamar Corp. is one of Canada's most prominent female CEOs. (J.P. Moczulski/Reuters)
Last year, as the world was digesting the reality of a Trump presidency, Hassenfratz said: "Mr. Trump is a businessman, he will make fact-based decisions."
Today, she admits it's "troubling" that his administration is making statements that are not factually correct.