Heavy taxes on Canadian and Mexican products were announced, shelved for a month — one day away from taking effect — imposed, then two days later adjusted to exempt, for now, a range of goods covered under the North American trade pact renegotiated in Trump’s first term. Trump’s aides say the reason for those tariffs is to end fentanyl smuggling and illegal immigration, though the president also wants to close the trade deficit with America’s two largest trade partners. The prevailing tensions between Canada and the U.S. flared when Ontario, the most populous province, retaliated against the U.S. duties with an announcement that it would add a 25% surcharge on electricity it exports to several states.

Paul Soubry, president and CEO of NFI Group, which owns the New Flyer plant in Jamestown, recently discussed the tit-for-tat tariff increase between Canada, where NFI Group is headquartered, and the United States, where NFI Group operates four manufacturing plants.

“While still developing, the potential for 25% tariffs on imports into the U.S.,” Soubry said. “And Canadian counter tariffs of 25% on imports from the U.S. into Canada remain a real possibility. As we know, there are now 25% tariffs in place on steel and aluminum imports into the United States. We are taking numerous actions to prepare and respond to these tariffs by adjusting supply sources where possible, leveraging our localized production facilities on both sides of the borders and regionalized aftermarket parts distribution networks, and continue to work on contractual terms of our firm orders. We have just also moved as much finished goods bus inventory as possible to the appropriate jurisdictions. This will help any lower near-term impact of tariffs.”

Within NFI Group’s New Flyer business, two-thirds of production takes place in the United States for U.S. customers. That means most products made in Jamestown aren’t as likely to be affected by tariffs. What happens with the other one-third of buses made by New Flyer is more complicated. Of the one-third of the company’s output that starts in Canada, about half are finished in the United States for American customers while the other half are sent back to Canada for Canadian customers.

Paul Soubry

“These buses would obviously have larger tariff exposure,” Soubry said during a recent conference call with investor analysts. “As we announced last year, we are now actively working on our all Canadian bus build plan to allow us to build full buses in Canada. This Project is on track and on budget, and it’s planned to start manufacturing full Canadian built buses in the fourth quarter of this year, and we will build that capacity through 2026. This too will help lower tariff exposure for Canadian imports.”

MCI, which is owned by NFI Group, is the only supplier of public coaches for Buy America contracts. Those buses typically have a shell built in Canada and then are finished in the United States. Tariff-related impacts will be passed on to customers, Soubry said. Potential losses in the U.S. market may be mitigated by possible increased European purchases. Canadian Prime Minister Mark Carney met with French President Emmanuel Macron on Monday during his first official overseas trip. He will next visit Britain, where he will meet with Prime Minister Keir Starmer and King Charles III, the head of state in Canada. Trade is an expected point of discussion – and Soubry said there may be opportunity for Canadian-based companies like NFI Group.

“In addition, importers from Europe may see pricing benefits compared to the Canadian importers unless there is a corresponding increase in tariffs applied by the U.S. government on European imports, of which there are strong signals that may happen,” Soubry said. “It is difficult to project the exact financial impact of tariffs. We are monitoring this closely and working with industry groups and our lobbyists to determine the best path forward. As mentioned in the short term, we have moved most of our private market coach inventory to theUnited States in advance of any potential tariffs being impacted. We will continue to collaborate with our customers, our suppliers, our industry partners and government partners on the tariff front to do as much as we can to alleviate the risks, and we will provide updates as things develop and how it relates to NFI.”

AP Photo Pedestrians walk past as Toronto residents Douglas Bloomfield, from right, his son Phoenix and wife Ame, left, who are on vacation in Washington from Toronto, hold a Canadian flag and an ice hockey stick to show their support for Canada regarding trade tariffs, in front of the White House in Washington, Thursday, March 13, 2025.