Business
In Canada’s ‘Suburb of Detroit,’ Fears Over Trump’s Tariff Threat
Since 1988, the hulking presses at Lanex Manufacturing on the edge of Windsor, Ontario, have been stamping out door strikers, folding-seat latches, tailpipe hangers, frame braces and other prosaic bits of metal that make their way into vehicles ranging from Corvettes to Honda minivans.
But, these days, worries about the future permeate the plant as President-elect Donald J. Trump prepares to enter the White House. He has threatened to impose a 25 percent tariff on all goods exported from Canada to the United States. In Windsor, that would ravage its lifeblood: automobiles and everything that goes into them.
“Everybody’s waiting for the next shoe to drop,” Bruce Lane, the president of Lanex, said in its boardroom, whose walls were made of painted concrete blocks. “If Windsor lost its automotive business, Windsor would not survive.”
Few Canadian cities are as acutely aware as Windsor of the integration of the two countries’ economies. The city sits just across the Detroit River from Detroit, and Canada’s maple-leaf flag often flies next to the stars and stripes there. And no industry has been interwoven across the border for as long as auto making.
“These workers here in Windsor are more exposed to trade with the United States than anyone else,” Prime Minister Justin Trudeau said at a steel plant during a recent visit to the city.
Mr. Trump, he added, “is proposing tariffs that would damage not just people here in Windsor but people right across the country and indeed in the United States.”
Windsor’s two major landmarks are shared with Detroit: the $5.7 billion Gordie Howe International Bridge, scheduled to open this year, and the 96-year-old Ambassador Bridge, which carries about $300 million in cross-border trade each day. Of Canada’s $440 billion in annual exports to the United States, only oil and gas generate a larger amount than cars, trucks and auto parts.
But with Canadian officials taking Mr. Trump at his word that he will follow through on his threat of tariffs, Mr. Lane and others in the auto industry are already bracing for the potential fallout.
George Papp is the chief executive of Papp Plastics, whose headquarters sits near the imposing new suspension bridge. He said his U.S. customers, mainly automakers, would simply invoke the terms of contracts he has with them and deduct the cost of tariffs from the amount they pay him.
“Who’s going to take the hit?” Mr. Papp said. “Me, and people like me and companies like mine.”
Flavio Volpe, the president of the Automotive Parts Manufacturer’s Association, a Canadian trade group, estimated that most of his members had single-digit profit margins and that the tariffs Mr. Trump was threatening would be ruinous.
The intertwining of the auto industry across the two countries was cemented in 1965 when Canada and the United States reached an agreement that effectively eliminated the border for the industry. Today, 90 percent of cars and trucks made in Canada are sent to the United States, primarily by train.
At Lanex, small metal parts that few motorists will ever see are forged into shape by upward of 600 tons of pressure by the firm’s presses. Their journeys illustrate how enmeshed the two countries’ auto industries have become.
As a small supplier, Mr. Lane does not deal directly with carmakers, but sells his goods through larger parts makers. Seat-locking hooks that Lanex makes for Honda minivans are sent to a plant elsewhere in Ontario, where they are fitted with other parts and then shipped to an assembly line in Alabama that belongs to Honda, a Japanese company.
Mr. Lane’s factory has sent parts to Michigan for heat treating, brought them back to Windsor for more machining and then sold them to a U.S. company.
“Windsor is used to going back and forth across the border,” Mr. Lane said. “It’s like just like getting up out of bed in the morning.”
The turmoil from possible tariffs comes at an already difficult time for Canada’s auto business. Many auto-parts manufacturers have yet to see their business return to levels from before the coronavirus pandemic because of lagging car sales. In 2020, Lanex had about 60 employees working on two shifts, but it now has about two dozen employees running a single shift.
The anxiety is particularly acute in Windsor, which has a metropolitan population of roughly 484,000. Aside from cargo trucks rumbling across the Ambassador Bridge, the city’s most obvious automotive symbol is a giant Stellantis factory that produces Chrysler Pacifica minivans as well as Dodge Charger muscle cars.
A city within the city, the European-based Stellantis employs 4,500 workers at the factory. Aided by billions of dollars in Canadian subsidies, it is building a battery plant in a joint venture with the South Korean company LG in Windsor and recently spent 1.89 billion Canadian dollars (about $1.3 billion) to retool its assembly plant to make electric vehicles alongside gasoline-powered ones.
But, like many auto makers, Stellantis is now in a slump as it struggles with the transition to electric vehicles and with competition from China.
James Stewart, the president of the local union that represents Windsor’s Stellantis workers, said he did not believe a large tariff would necessarily deal a fatal blow to Stellantis’s operations in Windsor, given how much the company had invested.
But with so much of Windsor’s economic well-being intimately tied to trade with the United States, Mr. Stewart said, tariffs would deal a heavy blow, including the closing of businesses, layoffs and production cuts.
“We’re a suburb of Detroit; we’ve always felt that way,” he said, adding that Windsor seemed to be “under attack and for no reason.”
Mr. Trump initially characterized tariffs as a way to prod Canada and Mexico into better securing their borders to tamp down the flow of undocumented migrants.
But he also mused about making Canada the 51st state, noting that the United States was heavily invested in Canada’s military defense, and threatened to use economic force annex it. He has also vented about what he describes as the “subsidizing’’ of Canada by the United States, an apparent reference to the U.S. trade deficit with Canada, largely because of oil and gas imports.
The Trudeau government is expected to detail how it would retaliate against any U.S. tariffs on Monday, the day Mr. Trump is to take office.
But Canada’s comparatively small economy makes it difficult for the country to inflict substantial economic harm on the United States, though levies against specific products could hurt individual states. Retaliatory tariffs would also drive up prices in Canada.
Back at the Lanex plant, Mr. Lane said that, by pure coincidence, the company had been embarking on a “secret” manufacturing project unrelated to automobiles and that had unexpectedly become a potential hedge against tariffs. He declined to offer any details to avoid tipping off competitors.
Mr. Papp, the plastics-company owner, said that even though he would oppose tariffs, which would hurt his business, he was a fan of Mr. Trump and understood why the president-elect had argued that tariffs were needed to help rebuild industry in the United States.
Regardless of what happens, Mr. Papp said, Canada and the United States will always remain unshakable allies.
“You can’t separate our countries,” he said. “They’re bolted together.”
Business
L.A. County sues oil companies over unplugged oil wells in Inglewood
Los Angeles County is suing four oil and gas companies for allegedly failing to plug idle oil wells in the large Inglewood Oil Field near Baldwin Hills.
The lawsuit filed Wednesday in Los Angeles Superior Court charges Sentinel Peak Resources California, Freeport-McMoran Oil & Gas, Plains Resources and Chevron U.S.A. with failing to properly clean up at least 227 idle and exhausted wells in the oil field. The wells “continue to leak toxic pollutants into the air, land, and water and present unacceptable dangers to human health, safety, and the environment,” the complaint says.
The lawsuit aims to force the operators to address dangers posed by the unplugged wells. More than a million people live within five miles of the Inglewood oil field.
“We are making it clear to these oil companies that Los Angeles County is done waiting and that we remain unwavering in our commitment to protect residents from the harmful impacts of oil drilling,” said Supervisor Holly Mitchell, whose district includes the oil field, in a statement. “Plugging idle oil and gas wells — so they no longer emit toxins into communities that have been on the front lines of environmental injustice for generations — is not only the right thing to do, it’s the law.”
Sentinel is the oil field’s current operator, while Freeport-McMoran Oil & Gas, Plains Resources and Chevron U.S.A. were past operators. Energy companies often temporarily stop pumping from a well and leave it idle waiting for market conditions to improve.
In a statement, a representative for Sentinel Peak said the company is aware of the lawsuit and that the “claims are entirely without merit.”
“This suit appears to be an attempt to generate sensationalized publicity rather than adjudicate a legitimate legal matter,” general counsel Erin Gleaton said in an email. “We have full confidence in our position, supported by the facts and our record of regulatory compliance.”
Chevron said it does not comment on pending legal matters. The others did not immediately respond to a request for comment.
State regulations define “idle wells” as wells that have not produced oil or natural gas for 24 consecutive months, and “exhausted wells” as those that yield an average daily production of two barrels of oil or less. California is home to thousands of such wells, according to the California Department of Conservation.
Idle and exhausted wells can continue to emit hazardous air pollutants such as benzene, as well as a methane, a planet-warming greenhouse gas. Unplugged wells can also leak oil, benzene, chloride, heavy metals and arsenic into groundwater.
Plugging idle and exhausted wells includes removing surface valves and piping, pumping large amounts of cement down the hole and reclaiming the surrounding ground. The process can be expensive, averaging an estimated $923,200 per well in Los Angeles County, according to the California Geologic Energy Management Division, which notes that the costs could fall to taxpayers if the defendants do not take action. This 2023 estimate from CalGEM is about three times higher than other parts of the state due to the complexity of sealing wells and remediating the surface in densely populated urban areas.
The suit seeks a court order requiring the wells to be properly plugged, as well as abatement for the harms caused by their pollution. It seeks civil penalties of up to $2,500 per day for each well that is in violation of the law.
Residents living near oil fields have long reported adverse health impacts such as respiratory, reproductive and cardiovascular issues. In Los Angeles, many of these risks disproportionately affect low-income communities and communities of color.
“The goal of this lawsuit is to force these oil companies to clean up their mess and stop business practices that disproportionately impact people of color living near these oil wells,” County Counsel Dawyn Harrison said in a statement. “My office is determined to achieve environmental justice for communities impacted by these oil wells and to prevent taxpayers from being stuck with a huge cleanup bill.”
The lawsuit is part of L.A. County’s larger effort to phase out oil drilling, including a high-profile ordinance that sought to ban new oil wells and even require existing ones to stop production within 20 years. Oil companies successfully challenged it and it was blocked in 2024.
Rita Kampalath, the county’s chief sustainability officer, said the county remains “dedicated to moving toward a fossil fuel-free L.A. County.”
“This lawsuit demonstrates the County’s commitment to realizing our sustainability goals by addressing the impacts of the fossil fuel industry on front line communities and the environment,” Kampalath said.
Business
Instacart is charging different prices to different customers in a dangerous AI experiment, report says
The grocery delivery service Instacart is using artificial intelligence to experiment with prices and charge some shoppers more than others for the same items, a new study found.
The study from nonprofits Groundwork Collaborative and Consumer Reports followed more than 400 shoppers in four cities and found that Instacart sometimes offered as many as five different sales prices for the exact same item, at the same store and on the same day.
The average difference between the highest price and lowest price on the same item was 13%, but some participants in the study saw prices that were 23% higher than those offered to other shoppers.
The varying prices are unfair to consumers and exacerbate a grocery affordability crisis that regular Americans are already struggling to cope with, said Lindsey Owens, executive director of Groundwork Collaborative.
“In my own view, Instacart should close the lab,” Owens said. “American grocery shoppers aren’t guinea pigs, and they should be able to expect a fair price when they’re shopping.”
The study found that an individual shopper on Instacart could theoretically spend as much as $1,200 more on groceries in one year if they had to deal with the kind of price differences observed in the pricing experiments.
At a Safeway supermarket in Washington, D.C., a dozen Lucerne eggs sold for $3.99, $4.28, $4.59, $4.69, and $4.79 on Instacart, depending on the shopper, the study showed.
At a Safeway in Seattle, a box of 10 Clif Chocolate Chip Energy bars sold for $19.43, $19.99, and $21.99 on Instacart.
Instacart likely began experimenting with prices in 2022, when the platform acquired the artificial intelligence company Eversight. Instacart now advertises Eversight’s pricing software to its retail partners, claiming that the price experimentation is negligible to consumers but could increase store revenue by up to 3%.
“These limited, short-term, and randomized tests help retail partners learn what matters most to consumers and how to keep essential items affordable,” an Instacart spokesperson said in a statement to The Times. “The tests are never based on personal or behavioral characteristics.”
Instacart said the price changes are not the result of dynamic pricing, like that used for airline tickets and ride-hailing, because the prices never change in real time.
But the Groundwork Collaborative study found that nearly three-quarters of grocery items bought at the same time and from the same store had varying price tags.
The artificial intelligence software helps Instacart and grocers “determine exactly how much you’re willing to pay, adding up to a lot more profits for them and a much higher annual grocery bill for you,” Owens said.
The study focused on 437 shoppers in-store and online in North Canton, Ohio; Saint Paul, Minn.; Washington, D.C., and Seattle.
Instacart shares were down more than 5% in midday trading on Wednesday and have risen 1% this year.
Business
Commentary: Is $140,000 really a poverty income? Clearly not, but the viral debate underscores the ‘affordability’ issue
On the Sunday before Thanksgiving, a wealth manager named Michael Green published a Substack post arguing that a $140,000 income is the new poverty level for a family of four in America, where the official poverty line is $32,150.
The post promptly went viral.
One would hope that economic commentators coast-to-coast mentioned Green as their “person I’m most thankful for” at their family gatherings that week, because he gave them something to masticate ever since. On the spectrum from left to right, countless pundits have rerun Green’s numbers to deride or validate his argument.
It is jarring that in one of the richest countries in the world, one-third of the middle class does not make enough to afford basic necessities.
— Stephens and Perry, Brookings
“The whole thing doesn’t pass the smell test,” asserted right-of-center economist Noah Smith in a very lengthy rebuttal. On the other side, Tom Levenson, who teaches science writing at MIT, gave us a Bluesky thread in which he noted that “$140,000 in many urban areas in the US is a family income that is at least precarious, and at worst, one or two missed paychecks from having to make rent-or-food choice.”
Green has asserted that the response to his post has been “massively favorable.” That isn’t my impression, but leave it aside.
Here’s my quick take: Green made a category error (and a rhetorical blunder) by hanging his argument on the concept of “poverty”; that’s the claim that most of his critics focus on. His real argument, however, concerns the concept of affordability. Indeed, in a follow-up post he redefined his argument as applying to “the hidden precarity for many American families.”
We can stipulate that making $140,000 a poverty standard is absurd. Even in a high-cost economy such as California’s, millions of families live comfortable lives on much less. (The median household income in Los Angeles County — meaning half of all households earn less and half earn more — is about $86,500.)
Plenty of working families are raising children and having fruitful social lives on median incomes or even less: Living thriftily is not the same as living penuriously or meanly. Much of what middle-class families give up are things that aren’t necessarily crucial. Green’s image of families stripped to the bones with mid-six-figure or even high five-figure incomes feels like something conjured up by an asset manager with a distinctly affluent clientele, which is what he is.
Yet, what his post alludes to implicitly is that the concept of “middle-class” has evolved over the last few decades, and not in a good direction. That’s why so many Americans, including millions with incomes that used to place them firmly in the middle class, feel strapped as never before, wondering how they can afford things their parents took for granted, such as putting the kids through college and saving for a comfortable retirement.
“The nation’s affordability crisis has not spared middle-class families, one-third of which struggle to afford basic necessities such as food, housing, and child care,” Hannah Stephens and Andre M. Perry of the Brookings Institution observed last week. Their analysis covered 160 U.S. metro areas, and held firm in all of them.
(They defined the middle class as falling into the income range of $30,000 to $153,000.)
Let’s give Green’s argument the once-over.
He started with the origin of the federal poverty calculation, which dates back to 1963, when a Social Security economist named Mollie Orshansky figured that since American households spent an average of one-third of their budget on food, if you estimated the cost of a minimally adequate food basket and multiplied by three, you might have a useful overall standard for poverty. She pegged that at $3,130 for a nonfarm family of four.
“If it is not possible to state unequivocally ‘how much is enough,’” she wrote, “it should be possible to assert with confidence how much, on an average, is too little.” She pegged that at $3,130 for a nonfarm family of four.
Green festooned his post with lots of hand-waving and magic asterisks to accommodate changes in American lifestyles over the ensuing six decades and come up with his $140,000 standard. But if one applies a constant inflation rate to Olshansky’s $3,130 via the consumer price index, you get about $33,440. As it happens, the government’s official poverty level for a family of four today is $32,150. Pretty close.
That’s an important figure, because it defines eligibility for a host of government programs. Eligibility for Medcaid under the Affordable Care Act (in states that accepted the ACA’s Medicaid expansion) runs up to income of 138% of the poverty level; higher than that steers families into ACA health plans. As KFF notes, “in states that have not adopted Medicaid expansion, adults with income as low as 100% FPL can qualify for Marketplace plans.”
Green’s critics generally note that the median household income in the U.S. was $83,730 in 2024, meaning that he’s placed well more than half of America into the poverty zone. That just swears at reality.
It needs to be said that Green’s approach differs from those articles that regularly appear asking us to commiserate with families earning $400,000 or $500,000 because they can’t make ends meet.
As I’ve reported in the past, these articles invariably depend on sleight-of-hand. They offer their own definitions of “rich” and list as necessary or unavoidable expenses many items that ordinary families would consider luxuries — lavish vacations, charitable donations (including to the adults’ alma maters), etc., etc. The strapped family eking out an existence on $500,000 featured in one such piece had fully-funded retirement and college plans, payments on two luxury cars, “date nights” every other week … you get the drift.
Levenson ran the numbers for a hypothetical family in his home town of Brookline, Mass., which is objectively upper-crust, but his approach applies more widely. Let’s run them for a hypothetical household in Los Angeles County. These figures are necessarily conjectural, because your mileage may vary — in fact, everyone’s mileage varies.
The median monthly rent in L.A., according to Zillow, is $2,750, or $33,000 a year. On the other hand, the median home price in the county is close to $1 million. At today’s average mortgage rate of 6.2% and assuming a 20% down payment, the cost of an $800,000 mortgage runs to $4,900 a month, or $58,800 a year. One can find a cheaper home farther from the coast, so for argument’s sake let’s posit a $500,000 home with a $40,000 mortgage: $2,450 a month, or only $29,400. But you’re probably living farther from work, so your transportation costs go up.
The property tax on that $1-million home: $10,000 in year one. (On the $500,000 home, it’s $5,000.)
State and federal taxes on a $140,000 income: about $18,000. Social Security payroll tax: $8,680.
So of our $140,000, housing and taxes leave us with somewhere between $44,500 and $78,920.
Food: The bureau of economic analysis pegs the annual spending of a four-member California family at an average $18,000. That figure is almost certainly on the upswing.
Healthcare? In its annual report on employer-sponsored health coverage, KFF found that the employee share of family covered reached $6,850 this year, with employers shouldering the balance of the average $27,000 total. For families on Affordable Care Act plans, the costs are impossible to calculate just now, because Republicans in Congress can’t get their act together to extend the premium subsidies that make these plans workable.
Then there’s child care. In the old days, when single-earner families were more common than today, that wasn’t as much of an issue than it is today. But if both parents work, children have to be stowed in child care until they’re old enough for kindergarten or first grade — let’s say up to age 5 or 6. In California, according to one survey, that’s about $13,000 per year per child.
A few more things we haven’t counted yet: cellphone account, say $100 a month; home Wi-Fi, another $100; computers, $1,000 or so each; cars, $17,000 to $25,000 used; auto and home insurance, $1,500 each; gasoline; and utilities ($3,300 a year, according to SoFi).
At the low end of housing costs, our California family has remaining monthly discretionary income of a few hundred dollars. At the higher mortgage level they’re underwater. Levenson adds, “our notional couple best not have any student loans.”
It’s also worth noting that our couple has put a dime into retirement or college funding. If they set aside 10% of their income for 401(k) contributions, they’re in trouble.
What we’re actually looking at is the collapse of the American middle class. “It is jarring that in one of the richest countries in the world, one-third of the middle class does not make enough to afford basic necessities,” Stephens and Perry of Brookings write. “The single woman living in Pennsylvania buying her first home, the Latino or Hispanic couple in Indiana running a local business, the Black parents in Texas starting their family — all of these faces of the American middle class are struggling with affordability when they shouldn’t have to.”
Trump could alleviate these pressures, notably by knocking off the tariff stunts. For all that he declares “affordability” to be a Democratic hoax or that his acolytes Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and White House chief economist Kevin Hassett try to smile away the reality, the American public isn’t fooled.
The Conference Board, a business think tank, reported that U.S. consumer confidence fell sharply in November. No surprise. Michel Green put his finger on something, and the likelihood is that things are only getting worse.
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