How New Brunswick's little-known auto sector is coping with tariffs

A Dieppe company that makes ambulances and accessible vehicles is among those in the Canadian automotive sector feeling the impacts of the trade war, according to its president and CEO.

Terry Malley says his company, Malley Industries, typically sells to the U.S. and Canada. Its sales to the U.S. are now subject to tariffs. 

"The biggest frustration that we've had is educating our U.S. customers what this is all about," Malley said.

"We have to communicate to them that our prices aren't changing. … These extra costs are … because of their government."

Tariffs and counter-tariffs of 25 per cent were slapped on Canadian and U.S automobiles and Canadian auto parts this month, on top of aluminum and steel tariffs introduced last month.

Malley shipped quite a few vehicles to the U.S. ahead of the latest round of tariffs — as did another New Brunswick company that makes automobiles, said Ron Marcolin, New Brunswick divisional vice-president for the Canadian Manufacturers and Exporters association, but that other company didn't want him to release its name or any other details.

Now that tariffs are being imposed at the border, some U.S. customers are asking for their deliveries to be delayed, Malley said.

"Obviously, they're concerned about their costs," he said.

Malley said he is well-stocked with vehicles that were assembled before any supply costs were inflated, but if the trade war goes on for long, he'll have to raise his own prices, too.

"Everything that happens to those [original equipment manufacturers] … comes right down to us," he said. 

"Second-stage manufacturers," such as Malley operate in communities across the country, adding content to make specialized vehicles. Besides ambulances and accessible vehicles, vehicle types include RVs and commercial trucks.

Malley uses vehicle bases — or chassis — from Stellantis and Ford, that are made in Mexico and the U.S., respectively.

Other inputs come from Canada, the U.S. and elsewhere. Among these are Canadian steel and thermoform plastic parts manufactured on-site in Dieppe.

Some inputs are now subject to counter-tariffs and Malley expects more could be in the future.