World of HR: As tariffs teeter, some employers in Canada and Mexico adjust headcount strategies

The US, Canada, and Mexico have traditionally been good, if not great, friends in the trading market. Now, the three countries are becoming more like Jaclyn, Kate, and Laurie from this season of The White Lotus. The world is watching the passive aggressive jabs, and regardless of how much the leaders smile during negotiations, the turmoil is already starting to impact the headcounts at some companies in Canada and Mexico.

President Trump has changed his tariff plans at least a dozen times since taking office, causing economic uncertainty for our neighbors to the north and south. In March, Canada lost a net 32,600 jobs in March, its first job losses since 2022, Reuters reported. As uncertainty took hold in January, employers in Canada have pulled back on hiring, and economists believe that layoffs will increase as the relationship between the two countries remains unstable.

“We continue to expect some further weakness in employment ahead, particularly in sectors most directly impacted by US tariffs, which could see the unemployment rate peak slightly above 7% during the second half of the year,” Andrew Grantham, senior economist at CIBC Capital Markets, said in a recent report.

Some aluminum and steel workers have already lost their jobs in Canada, and car manufacturer Stellantis has paused production at some plants in Canada and Mexico, according to the Detroit News.

“Every day, we have projects that were ready to move forward being put on hold by our clients,” Eascan Automatic Inc., a Canadian robotics company, told CTV News of its decision to reduce its workforce by one-third. “The main feedback we receive is that, due to the uncertainty of the current economic scenario, manufacturers are finding it difficult to plan or justify their capital expenditures.”

Employers in Mexico are working with its government to avoid the pain of potential US tariffs, although many are uncertain if they’ll have to lay off employees if the Trump administration keeps moving the goal posts, Al Jazeera reported. Some companies are reconsidering headcounts while others may move production facilities to the US.

For now, some Mexican and Canadian imports are shielded from tariffs thanks to the US-Mexico-Canada Trade Agreement, while other goods from Canada have a 25% tariff, according to the latest report from Yahoo Finance.

However, this could all change again tomorrow so stay tuned!