Regional industries prepare for potential disruptions as U.S.-Canada trade tensions escalate

THUNDER BAY – BUSINESS ANALYSIS – July 10, 2025: As United States President Donald Trump once again revives his tariff threats against Canadian imports—with a looming August 1 deadline—businesses across Northwestern Ontario are assessing the potential economic fallout.

Many of our region’s key industries including forestry, mining, manufacturing, and transportation stand particularly vulnerable to renewed disruptions in cross-border trade, prompting concern among business and political leaders alike.

This is a part of the Trump tactics on trade negotiations. He makes huge threats and pumps out enough bluster threatening other countries designed to get them to back down.

Trump is threatening Canada with tariffs on copper totally 50%.

Perhaps a solution for Prime Minister Mark Carney would be to simply move to protect Canadian industry and offer supports as the companies and Canada finds new markets. It is obvious that as long as Donald Trump is in the White House, the long and very profitable and friendly relationship with the United States is broken.

Manufacturing and Supply Chain Vulnerabilities

Manufacturing in Northwestern Ontario relies heavily on smooth cross-border trade.

The ease of getting needed parts, and other components could be impacted with increased tariffs. Manufacturers sourcing U.S. components or exporting finished products to American markets could face:

• Increased production costs

• Reduced competitiveness in U.S. markets

• Supply chain delays and uncertainty

• Potential job losses in production and logistics sectors

Forestry Sector Under Pressure

Northwestern Ontario’s forestry industry has long depended on strong exports, particularly softwood lumber, pulp, and paper products.

Any renewal or intensification of tariff disputes with the U.S. threatens stability for sawmills, pulp mills, and logging operations in communities like Thunder Bay, Dryden, Fort Frances, and Kenora.

While lumber tariffs have previously targeted western provinces more directly, sector-wide tariffs could have indirect ripple effects:

• Higher export costs

• Reduced competitiveness compared to international suppliers

• Potential layoffs or reduced hours for forestry workers

• Decreased investment in the sector due to uncertainty

Mining Industry Faces New Challenges

Trump’s specific targeting of copper imports at a rate of 50 per cent raises alarms for Northwestern Ontario’s growing mining sector, which has recently expanded exploration and production of copper and other critical minerals.

Ontario’s copper industry, with substantial operations in and around Thunder Bay and Red Lake, exported approximately $9.3 billion worth of copper products in 2023—more than half of which was destined for the U.S. market.

Pierre Gratton, president of the Mining Association of Canada, warned these tariffs could inadvertently benefit China, as the U.S. lacks sufficient smelting capacity:

“It’s going to hurt our mines and manufacturers… but ironically it may help Chinese smelters at our expense.”

Possible impacts include:

• Immediate strain on regional copper producers

• Lower investment interest in mining projects

• Potential job cuts or delayed expansions in regional mining hubs

• Negative ripple effects on local communities dependent on mining

Transportation and Logistics Disruptions

Cross-border shipping is a cornerstone of the Northwestern Ontario economy. Trucking and rail companies in Thunder Bay and across the region would immediately feel the impacts of tariffs through reduced trade volume, delayed shipments, and logistical complications.

Businesses reliant on timely delivery of parts and equipment from the U.S. would face disruptions, leading to increased costs and potential layoffs in transportation sectors.

Political Leaders and Business Advocates Speak Out

Federal and regional leaders are already voicing strong opposition to Trump’s proposed tariffs:

• Pierre Poilievre, federal Conservative leader, has labeled the tariffs an “unjustified attack on Canada’s economy,” with ripple effects across regions like Northwestern Ontario.

• Lana Payne, Unifor president, called for collective strength: “Canada must use every bit of leverage we have. Workers in Northwestern Ontario are counting on government support to defend their jobs.”

Local business leaders echo these concerns, urging the federal government to continue negotiations with the U.S. while actively seeking alternative international markets to reduce dependency.

Potential Economic Scenarios for Northwestern Ontario

Economists suggest several scenarios depending on tariff outcomes:

• Short-Term Scenario: Immediate disruptions, rising operational costs, uncertainty, possible layoffs.

• Medium-Term Scenario: Shifts in regional trade patterns, lower investment, slower economic growth.

• Long-Term Scenario: Potentially diversified international markets, stronger regional resilience if alternative trade partners are secured.

The Need for Preparedness and Diversification

Trump’s tariff threats underline a growing regional economic imperative: diversification.

Local businesses and leaders are increasingly recognizing the need to strengthen ties beyond the U.S., exploring opportunities in Europe, Asia, and other Canadian provinces.

In the meantime, Northwestern Ontario industries must prepare for more uncertainty, engage policymakers to mitigate impacts, and prioritize resilience to navigate this escalating cross-border dispute.

While Trump is infamous for his Thursday threats so he garners Friday and Saturday media coverage and can dominate the United States Sunday morning television shows, before backing down by Monday or Tuesday, the ongoing impact of this volatility is a serious impediment for business, especially large industries like mining and forestry is causing great uncertainty.