The potential impact of Trump's tariff plans on St. Thomas EV factory

President-elect Donald Trump dropped a bombshell on Truth Social on Monday evening – stating “as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States.”

Trump claimed that the sweeping policy is retaliation for illegal immigration and drug smuggling.

The announcement made shockwaves across the Canadian political landscape, but in our own backyard there are concerns about the tangible impacts of those tariffs, especially when it comes to the future of the Volkswagen battery plant which is under construction in St. Thomas.

(Source: St. Thomas EDC/Youtube)

Local experts in manufacturing say that the newly announced tariffs spark mixed feelings.

"Since they haven't poured concrete yet in St. Thomas, I would not be surprised given the current dire situation Volkswagen is also facing in Germany that they may reconsider the investment in that plant,” shared Ivey Business School’s Andreas Schotter

At the end of October, there were reports that Volkswagen was considering closing three plants in Germany as part of cost-cutting measures along with an EV plant in Brussels, Germany.

With massive investments in local infrastructure to support the new plant’s operations, and bumps in funding from both the the federal and provincial governments, any hesitation from Volkswagen would serve as a massive blow to the local economy, where Volkswagen’s plant is projected to be a powerhouse.

A Volkswagen logo of a car dealer is pictured in Neu-Anspach near Frankfurt, Germany, Wednesday, Oct. 30, 2024. (AP Photo/Michael Probst)

However, the Trillium Network for Advanced Manufacturing’s Brendan Sweeney said that he is unconcerned about the future of Volkswagen in the region.

"Volkswagen's not - you know, they've not made decisions about billions upon billions of dollars of investments in Canada and the United States and Mexico, without understanding the potential impacts of one president versus another president. "

The first battery cells are expected to be completed by 2027, and the price tag for the plant’s construction has been estimated at $7 billion.

More than 100 employees have been hired so far with hundreds more anticipated in the coming years.

A company spokesperson refused an interview request from CTV News London, saying that they won't speculate on what may happen when Trump takes office on January 20.