Roshel Inc., a Brampton, Ontario-based manufacturer renowned for its armoured vehicles, has recently inaugurated a new production facility outside Detroit, Michigan, amid increasing concerns over tariffs proposed by President-elect Donald Trump. This 40,000-square-foot plant is seen as a strategic move to avoid the worst impacts of potential 25 percent tariffs on all Canadian goods, which Trump is expected to impose upon assuming office.
Chief Executive Roman Shimonov emphasized the significance of their location, stating, “Definitely, it is related to Trump’s administration and also definitely to potential changes in the way tariffs are working.” The company, which has direct ties to several U.S. government agencies, cites this facility as a pathway to maintain its competitive edge amid looming tariffs. Shimonov admitted, “Unfortunately, we don’t get the same level of orders in Canada” as they do from U.S.-based clients, including the Departments of Homeland Security and State.
Founded only six years ago, Roshel initially carved out its niche by manufacturing vehicles for cash-and-transit companies before dramatically shifting its focus to military applications following Russia's invasion of Ukraine. They have dispatched over 1,500 vehicles to Ukraine, though only about 200 were donated by the Canadian government. "We are getting most of our orders from the U.S. government," Shimonov added.
The looming tariff threat is causing ripples across various sectors of the Canadian economy. According to the Royal Bank of Canada, domestic merchandise exports to the United States topped $548 billion in 2023, accounting for nearly 77 percent of Canada’s total exports. The bank particularly flagged the motor vehicle manufacturing sector and the energy sector as vulnerable due to their heavy reliance on U.S. markets.
Recent statements by former Finance Minister Chrystia Freeland characterized the impending tariffs as “a grave threat” to Canada, indicating the need for preparedness. "That means keeping our fiscal powder dry today, so we have the reserves we may need for a coming tariff war,” she warned.
Beyond the commercial sector, the broader economic outlook for Canada is also clouded by uncertainty as the incoming Trump administration plans to reshape North American economic relations.
Canadian officials are rallying to defend the integrity of their economic relationship with their southern neighbor, recognizing the potential for disruption should tariffs go forward. Christian Leuprecht, a professor at the Royal Military College and Queen’s University, expressed concerns over Trump's linkage of trade to national security. He noted, “Free trade and Canadian prosperity hang in the balance.”
Over the past few weeks, Canada’s provincial and territorial premiers have united to craft their response to Trump’s tariff threats. During their recent meeting, the Council of the Federation discussed strategies, including boosting federal defense spending to two percent of GDP—a NATO benchmark. Ontario Premier Doug Ford stated, “We need to work together; stronger together means putting this fortress Can-Am together.” Ford revealed plans for Canadian premiers to visit Washington, D.C. to advocate for collaboration between the two nations.
Echoing concerns raised by other regional leaders, Saskatchewan Premier Scott Moe and Alberta Premier Danielle Smith both stressed the importance of engaging with U.S. officials to prevent tariffs. Smith cautioned, “Tariffs are their own punishment... when Americans start seeing…a 25 percent increase on their goods, I suspect that's going to be persuasive.”
The potential for tariffs poses serious risks not only for Canadian companies but also for key U.S. sectors. A February report indicated systemic vulnerabilities within the supply chain, raising alarms over how Canada’s economic health is intertwined with U.S. stability.
With Trump’s tariffs threatening to rekindle challenges posed during previous trade negotiations, Canada understands it must be proactive. Experts suggest strategic alignment with U.S. interests could serve as leverage against potential tariffs.
Despite the turbulent trade climate, there is some optimism about bilateral economic cooperation. The North American industries are interdependent, and historical negotiations have frequently reached compromises—even as tensions have simmered. Some analysts believe Canada may bargain away Trump’s tariffs, leveraging cooperation on illegal immigration and narcotics enforcement.
Canada’s economic vulnerabilities, particularly its productivity performance, also lend urgency to the need for structural reforms. The economic outlook suggests productivity growth is key to sustaining Canada’s competitive position. A collective response involving public and private sectors’ collaboration could help address concerns surrounding trade, supply chains, and productivity, which have become increasingly pressing in the current geopolitical climate.
Canadian officials are determined to navigate these economic challenges head-on and safeguard the relationship with the United States. By presenting unified diplomatic efforts, they aim to quell tariff threats, stabilize lines of supply and trust, and reinforce the economic interdependencies shared across the border.
