Ontario could feel the pain if Trump makes good on auto tariff threat but no one knows how much it'll hurt

Ontario may be the heart of Canada's auto manufacturing industry, but its premier-designateisn't saying what steps he'll takeif the U.S. president's threat of tariffs land the province in that country's crosshairs.

Just moments after a joint communiqu outlining nearly 30 points of agreement by the G7 leaders this weekend, Donald Trumptook to Twitter saying he was instructing his representatives not to endorse it as theylookinstead at tariffs on "automobiles flooding the U.S. Market."

In a followup tweet, Trump singled out Prime Minister Justin Trudeau for rebuking his decision to levy tariffs on Canadian steel and aluminum.

Exactly what automobile tariffs could mean for Canada isn't clear. In Ontario, the auto industry is concentrated in a stretch from Oshawa to Windsor, the lion's share of itsproducts going into American and Japanese vehicles.

But while Ontario will have a new leader at the helm in just three weeks, premier-designate Doug Fordwho has previously stated his unequivocal support for Trumpsaid little on Sunday when asked for a response to the U.S. president's threat, which could conceivablyhit Ontario harder than anywhere else in Canada.

'Shoulder to shoulder with the Prime Minister'

"We will stand shoulder to shoulder with the Prime Minister and the people of Canada. My number one goal is toprotect jobs in Ontario, starting with my unwavering support for our steel and aluminum workers," read a statement sent by a spokesperson on Ford's behalf.

With some 40,000 jobs in auto assembly across the country and 80,000 more in auto parts, national president of Unifor Jerry Diassays there is real cause for concern.

But a hit against Canada's auto industry will mean pain for the United Statestoo.Dias points out that the last time the U.S. put tariffs on steel in 2002 under then-president George Bush, itlost over 225,000 jobs,because of steel-related industries that got battered as a result.

"It's a fool's game but we're looking at a personality south of the border that's not looking at things logically," he said.

'Using tariffs as a weapon'

In Dias's view, Trump's tweets are more about political posturing than anything else an attempt, he says, is aimed at solidifying his political base ahead of the November midterm elections.

And while keen to point the finger at Canada, Trump conveniently leaves out of the discussion that agriculturaland oil industries in the U.S. each enjoysubsidies over $20 billion US or more.

"It's almost as if there's no mirrors in the White House," he says, adding that Trump's unpredictability is perhaps the biggest danger in the Canada-U.S. trade war.

On that point, international trade lawyer Lawrence Herman agrees, saying that while Canadian jobs are at risk, the very possibility of tariffs positions the U.S. as a more secure environment for investment.

"One of the objectives of the Trump administration is to keep capital and investment within the United States. He doesn't want companies investing in Canada, Mexico or anywhere else," he said.

The more threats, the more uncertain the investments outside the U.S.

"Using tariffs as a weapon adds to the element on uncertainty."

'Bizarre'for a Republican to become a 'tarrifist'

And for anyone discounting Trump's Twitter talk as mere bluster, both Dias and Herman point to the manoeuvres made since the start of the NAFTA renegotiationin August 2017, beginning with penalties on softwood lumber, paper, aerospace, steel and aluminum.

The automotive industry, they warn, may well be next.

ButRob Burton, mayor of Oakville, Ont., is taking the threatinstride.

Home to the 65-year-old Ford assembly plant, employing some 4,600 people, Oakvillecould see real fallout if Trump delivers on thislatest threat.

"Its a bizarre thing for a Republican to become a 'tarrifist,'" he said. "But here we are."

But Burton says he has confidence in the Canadian government to take the necessary steps to push back. Besides, he saystariffs aren't measures that take immediate effect.

"They can drive marketsbut they're not going to change output or employment overnight," he said.

The Oakville mayor says he'sholding out for a "major realignment of American politics," hoping the upcoming midterm election sees Trump lose his grip on power.

"I counsel in all things:'Don't panic. Keep your goalie stick on your ice. Keep ready, but don't panic.'"