How Tariffs are Impacting Manufacturing Recruitment
In the midst of a trade war with our long-time neighbours to the south, tariffs have been at the forefront of political agendas, as well as on people’s minds and in the media. Talk of tariffs is everywhere.
With $2.5 billion (US) crossing the border every day, tariffs have the ability to significantly impact the day-to-day lives of consumers and businesses on both sides of the border. But in this article, we’re going to zoom in on the unique impacts of tariffs on the world of manufacturing recruitment.
But first, let’s lay out the real definition of the word ‘tariff’ and eliminate any confusion.
What is a Tariff?
At its essence, a tariff is just another form of tax – the key difference being on where it is applied. A tariff is a type of tax that is imposed by a government on imported products, where a tax is charged directly to taxpayers.
The goal of a tariff is to protect domestic industry by making foreign goods more expensive.
Consumers don’t pay tariffs directly, but they do end up holding the bag when businesses inevitably hike their prices to cover the cost of the tariff. But it is the importing business that pays the tariff upfront.
Tariffs on Manufacturing
In March of 2025, the US Government imposed 25% tariffs on Canadian goods and 10% on energy exports. Cars are one of Canada’s biggest exports to the US, along with motor vehicle parts and accessories, steel, and aluminum. As such, machinery and equipment manufacturing are one of our largest US-bound export industries.
It’s important to note that the Government of Canada has retaliated with its own tariffs in an attempt to protect our industries as well. The US tariffs combined with the Canadian retaliatory tariffs will mean even higher price tags for Canadian consumers.
Example: Car Manufacturing
The car industry is a great example of how tariffs will impact the Canadian manufacturing industry, consumers, and manufacturing recruitment. In a typical scenario, Canadian steel plants will sell steel to US auto parts factories, which is subject to a tariff. The US auto factory will then us that steel to make parts and sell them back to Canadian car assembly plants, which will be hit with a Canadian tariff. That means by the time Canadians go to purchase a new car, sticker prices at the dealership will be far higher to offset the addition of two separate tariffs.
The Impact on Manufacturing Recruitment
What does this mean for manufacturing industry recruitment?
Increasing Costs
Cost is at the heart of the issue for businesses, consumers, and recruiters. Increasing costs are the first domino to fall with the ability to impact everything else down the line. The tariffs make everything more expensive, including raw materials for production and finished products.
Shrinking Demand
At the end of the day, higher prices will make Canadian products from Canadian manufacturers less competitive at home and abroad. Not only will Canadian businesses earn lower profits, but they may lose customers altogether.
Layoffs
With skyrocketing costs and increased competition, the Canadian manufacturing sector is ripe for rounds of layoffs and hiring freezes. A reduction in staff will be the best strategy for controlling costs and remaining competitive in this new market for many manufacturers.
Unfortunately, the layoffs are already underway. Algoma Steel, Canada Metal Processing Group, Sheertex, and South Shore Furniture have already introduced layoffs for plants in Ontario and Quebec.
Job Market Saturation
With hundreds of Canadians already out of work due to the tariff-induced layoffs and many more to follow, the job market is soon to be flooded with applicants. Businesses can expect high volumes of job applications for open positions, which will put strain on resume screening and the entire hiring process. Times like these make manufacturing recruitment services even more vital.
Loss of Investment
With tariffs in effect and uncertainty around costs and demand looming overhead, major manufacturing projects may be put on hold or cancelled altogether. The tariffs create a market filled with lots of risk, which investors tend to avoid at all costs.
Major Disruption
With the layoffs and funding cuts, Canadian manufacturing recruitment can expect major disruption. With the cost of doing businesses becoming unbearably expensive for many operations, it’s possible that entire manufacturing facilities pick up and re-locate overseas.
Degrading Trade Ties
Ontario is by far the largest manufacturing province in the country, accounting for nearly half of all manufacturing sales. Along with nearly 60% of all vehicle manufacturing taking place in Ontario, the province also boasts strong manufacturing sectors for food, metal, and energy products. With Ontario’s strong trade ties, this all means the province is at greater risk than others that rely less on manufacturing.
With the manufacturing industry in flux due to the recent US tariffs, having an experienced manufacturing and operations recruiter in your corner is more important than ever. STRIVE Recruitment specializes in connecting with top-tier talent in various manufacturing and operations roles, with offices in Vancouver and the Greater Toronto area. Contact us today to learn more and inquire about our recruiting services: