U.S. / Canada trade war. How will I be affected?
How badly will this trade war affect me and my small shop?
The answer: I'm not sure because there are many moving parts to this mess before it finally reaches us. But it will reach us quickly—it always does.
What we can be certain of is that our costs for parts and products will increase, and we'll have to pass this on to our customers. This will undoubtedly impact the add-on services, particularly for our customers with smaller budgets.
You may think that these Trump tariffs will only be paid by U.S. customers buying Canadian goods, and you are correct, for the most part. By simple design, the tariffs are intended to make our exported products less attractive by price and to encourage US customers to buy Made-In-America products.
Other than those legislated by Canada, all US products coming into Canada are not taxed, and all Canadian products exported to the US will be taxed.
But, here's where it gets tricky;
- All products produced here but destined for US assembly, packaging, or processing are also taxed, even if they are entirely destined for Canadian markets.
- All American products that require imported parts for assemblies will be taxed on the imported parts.
There's no getting around it. The price of most products we purchase will increase.
However, there is a bright side.
All products produced here in Canada and destined for our Canadian markets will not be affected by tariffs.
So, the answer would seem to be "Buy Canadian".
Yes, I wholeheartedly agree.....while you still can.
I say "while you still can" because a growing problem will profoundly affect our Canadian manufacturers.
There's a problem brewing.
When Canada entered the North American Free Trade Agreement (NAFTA) in 1994, which lifted all tariffs and was subsequently replaced with the United States-Mexico-Canada Agreement (USMCA) in 2020, our Canadian manufacturers began focusing heavily on US markets so much so that they became complacent about their local and regional markets here at home.
On the front line of this industry, we recognized this through the absence of factory field representatives, local market engagement, and support. As a direct result, the reasons for maintaining brand loyalty were deminished. Our product choices had changed to 'price and availability'.
This weakened the Canadian markets for our Canadian manufacturers. Since Canadian producers no longer secured local markets, foreign suppliers could fill the gap, further weakening the marketplace.
Now, we get blindsided by Trump's tariffs.
That means the tap for the US markets was turned off, which seriously affected not only our Canadian manufacturers, but our US counterparts who have depended on us.
Given the evidence and facts, it doesn't look promising if the tariffs stay in place for any length of time. I don't know how many can quickly adapt to the storm without the US markets and weak Canadian market shares.
Our U.S. Relatives
Yes, there is significant turmoil in the US political arena, with stock markets fluctuating wildly and a potential recession looming, all created by one person, Donald J. Trump. We have no idea what the near future will bring. But can we afford to wait and see?
Yes, I consider the automotive aftermarket south of our border, our extended family, because we have always shared and depended on each other for so much. So, we certainly cannot get mad at them for any of this, because they are going through far worse than we will experience. We're already seeing this, with the loss of their trading partners, their economy crashing, extensive layoffs, and, soon, many business closures. I can't see much light at the end of the tunnel for them.
Trump's plan is definitely backfiring.
A Way Out
What did we do, here in Canada, before NAFTA?
Every manufacturer had an army of field representatives whose job was to build and manage local markets. They brought with them all the tools and resources needed to provide factory support to local installers, dealers, and distributors. This was a relationship, not advertising, and it was this relationship that served as the marketing foundation for manufacturers to secure their strengths in the Canadian marketplace.
That era may be gone, but the lessons we learned hold the answers to not only surviving this storm, but coming out the other end stronger and more secure.
The solution is a 'grassroots' one: reengaging with individual commercial customers in their local markets to rebuild relationships. Show your support by listening and solving issues. Give them the resources they need, and improve customer service programs. Since 'Buy Canadian' is now at the forefront, commercial customers are more apt to support our home manufacturers, especially those who are willing to work for them.
This can be done through IT, without hiring armies of representatives.
Every effort is a step in the right direction, and here at ASBN, we will do our part to make this effort a reality for this region of BC.
This may not be a total solution to the problem, but it will help them survive this storm. Plus, they will be even more secure in their local and regional markets when these tariffs are finally lifted.
Can we improve on that concept? Of course, we can. However, that would require a more national and collaborative approach, which is a topic for another discussion.
As it stands, I don't think we would even notice if some of our long-standing manufacturers had to close their doors forever, and that's a shame.
Bob Paff
Editor, ASBN Publications
New Westminster, BC
"Connecting Our Industry Together"
We Hate Issues
Did you know that;
- In BC, anybody with tools can call themselves a Mechanic or even a Technician.
- Some tire manufacturers have reduced tread widths to save money but compromise safety.
- "Meets O.E.M. specs" has everything about 'fit' and nothing to do about quality.
- You are held legally responsible if a part fails and causes an accident and/or injuries.
- We used to be on guard for cheap, counterfeit parts trying to infiltrate our markets, and now they are mainstream?
Parts Mfgs. Lost Touch with Customers
Mr. Manufacturer,
Who is your biggest customer?
Who do you depend on the most to choose your products?
If you're thinking of the local jobbers or Mr.John Q. Public, give your head a shake.
Marketing and Advertising on ASBN
We've changed the marketing landscape.
We know that, unlike consumer marketing, commercial marketing centers around building relationships with your customers. When you are successful, volume sales will follow, and individual item sales to retail customers are left to the retailers.
This basic principle is what built the Automotive Aftermarket. It was a lot of work by dedicated sales forces, but it was what we had.
That is, until the internet came along.
The lure of this new medium and the promises of endless customers and cost savings from highly trained internet marketing specialists were hard to overcome.
And so, we evolved. But was it the right move?
If your focus is on the general consumer, I agree it was a good move.
But, if you are focused on commercial customers and do not have direct contact with them, it doesn't deliver.
Why? It's simple. Your focus is, or at least was, on building commercial accounts and volume sales, and the open internet is primarily tailored to the general population, which is not your audience.
What is even more frustrating is that internet marketing specialists do not understand the definite distinction between commercial and consumer marketing. They were never trained to know. To them, it's all internet marketing.
Of course, with sufficient time and funding, any software can be created or manipulated to deliver specifically to your needs, but that pushes the realm of affordability.
Another main issue, of many, is that you have no control over who will view your advertisements. Your message is what's important. Will it be generic, aimed at the general public, or specific for the professionals of our industry?
Here's one more of many issues that really bother me and need fixing.
What about all the small—to medium-sized community-based commercial businesses that do not have substantial marketing budgets or even websites, for that matter? Marketing and advertising costs have ballooned beyond their reach. Read this article.
For all commercial enterprises in the automotive aftermarket industry, the evidence has shown us that internet marketing, in its present form, does not work for us.
Can we fix it? Absolutely.
Here, at ASBN, we have created a more effective and straightforward approach.
This network focuses on attracting all stakeholders of only one industry, the Automotive Aftermarket, not the general consumer.
It is also designed as an intranet, open only to registered members, which allows us to focus from within this industry.
These two items alone are enough to change the marketing landscape to a direct, commercial approach and separate ourselves from the public internet realm.
But that's just the beginning.
It is geographically market-specific, which means that all members, suppliers, and users alike who have a stake in this particular market
region of British Columbia would benefit the most. We have also divided this BC market area into ten geographic regions to achieve better demographics, function, and management.
This new platform will also allow you to;
- Apply your focus to industry sub-segments like shop management, service technicians, or tooling.
- Focus your business advertising on a particular market region or selected regions of BC.
- Have direct connections to your existing commercial customers who need your personal support.
- Have the ability to distribute training and product resources
- Adjust your advertising messages to resource content vs. consumer brand-building
Isn't commercial marketing all about starting and building relationships?
This isn't rocket science. It's just plain logic and common sense from our viewpoint, not from the so-called marketing gurus.
We know what we need.
Let's do some more.
