Good afternoon, Mr. Chair and committee members.
I want to say a special thank you for inviting me here today to speak to you about my briefing on the urgent response required for the section 232 tariffs and the impact on the Canadian mould-making and steel fabrication industry.
My name is Jonathon Azzopardi. I'm the owner and CEO of Laval International, and I'm also a board member of the Canadian Association of Moldmakers.
I feel it appropriate to give you the overview on the recent changes in the U.S. section 232 tariffs, including their expanded application to the full value of Canadian-made goods containing steel. They represent a significant escalating threat to Canada's mould-making and broader steel fabrication industry. These measures should not be viewed as an isolated, temporary trade action. They reflect a deliberate, structured policy direction that risks systematically weakening the Canadian advanced manufacturing base over time.
Unlike the initial proposed tariff increase of 50%, which would have caused immediate severe disruption, the current phased tariff structure of 10% to 15% in 2026 through 2027, increasing to 20% to 25% thereafter, presents a strong and strategic sustained challenge. This phased approach creates predictable, long-term cost pressures. It enables a gradual erosion of Canadian competitiveness and encourages incremental relocation of production and sourcing decisions to the United States. This should not be interpreted as a short-term negotiation tactic. It is a structured mechanism designed to influence long-term industrial investment decisions.
There is a clear precedent for this policy approach. The United States has previously implemented trade and industrial measures that have had the intended effect of shifting automotive production and capacity. The current application of the section 232 tariffs suggests that the attention is now shifting beyond the final assembly plants to the remaining upstream supply chain, including mould-making, tooling and steel fabrication. The implications for the Canadian industry are wide. The consequences extend well beyond mould-making to mould-makers, steel fabricators, automation and fixture builders, steel mills and broader manufacturing supply chains.
The application of this tariff to the full value of finished goods rather than just to the steel inputs disproportionately impacts high-value engineered products, penalizing Canadian labour, engineering and innovation. That's the industry we're in.
Efforts to diversify away from U.S. markets may provide some short-term mitigation, but they do not resolve the structural disadvantages created within North America. The mould-making sector employs approximately 58,000 within the MTDM sector, which contributes well over $2.5 billion directly to the GDP. What is more alarming is the broader supply chain that supports hundreds of thousands of jobs, about $16 billion in GDP, and this industry supports about 12% of the total GDP of Canada.
Ongoing trade frictions in North America create a strategic vulnerability. It weakens the integrated continental supply chain, increases the resilience of the offshore, low-cost producers, and risks enabling external competitors to gain market shares within North America. Canada, the United States and Mexico share a mutual interest in maintaining a strong and competitive manufacturing base.
Given the urgency and the scale of the risk, immediate federal action is required. We respectfully urge the Canadian government to engage with U.S. counterparts to address the application of the section 232 tariffs on the full value of the goods, advocate for an exemption for moulds and tooling, advocate for tariff applications limited strictly to the steel content, reinforce the importance of integrated North American manufacturing under the USMCA or CUSMA, recognize the cascading impact across all steel fabricators and supply chain industries, and prepare a targeted support measure should resolution timelines be extended.
Commercial decisions are being made immediately in response to this pricing pressure. Market losses are difficult to reverse once production has shifted. Supply chain impacts are widespread and compounding, and workforce displacement risks are imminent.
On April 4, overnight, our industry went from being profitable to not being profitable.
In conclusion, the current implementation of the section 232 tariffs represents a structural and strategic challenge to Canada's manufacturing base. Evidence from the automotive sector demonstrates how this sustained policy pressure can reshape the industrial geography over time. The extension of similar pressures to upstream industries now places Canada's remaining manufacturing ecosystem at risk.
Thank you.