A Brampton factory that ships $100 million worth of zinc oxide annually to the U.S. is closely monitoring the escalating threat of 25 per cent tariffs proposed by U.S. President Donald Trump, which could significantly impact its business and the broader North American supply chain.
Zochem, North America’s largest producer of zinc oxide, has been a fixture in Brampton for over 50 years and is emblematic of the deeply intertwined Canadian and U.S. economies. The factory refines zinc oxide, a critical component in products like tires, sunscreen, pharmaceuticals, animal feed, and diaper rash creams.
Zochem’s manufacturing process illustrates the complexity of North American trade. The zinc is mined in Alaska, refined in Trail, BC, and sent to Zochem’s Brampton plant, where it is processed into zinc oxide. Most of the final product is then shipped to customers in the U.S., including tire companies, pharmaceutical firms, and food additive manufacturers.
Mohit Sharma, President and CEO of Zochem, highlights the widespread impact of zinc oxide:
“It’s in everything from tires to sunscreen and diaper rash cream. We work with globally recognized companies across multiple industries.”
A 25 per cent tariff on Canadian goods would significantly increase costs for American manufacturers that rely on Zochem’s products, embedding higher prices into everyday goods like cars, pharmaceuticals, and food products.
For Zochem, the potential tariffs represent a period of uncertainty. Sharma describes the company’s current position as a “wait and see” scenario:
“Twenty-five per cent tariffs on all products entering the United States seems like a big lift for even our fellow Americans,” he said.
The proposed tariffs underscore tensions between Canada and the U.S., two long-time trade partners. Flavio Volpe, head of the Auto Parts Manufacturers Association, called the trade dispute a “fight amongst partners”, noting that such battles ultimately benefit external competitors.
Meanwhile, industry leaders like Jean Simard, President of the Aluminum Manufacturers Association, and Catherine Cobden, President of the Canadian Steel Producers Association, see an opportunity for Canada and the U.S. to strengthen their partnership. Cobden points to joint tariffs on Chinese steel as an example of successful collaboration against unfair trade practices.
As February 1 approaches, Zochem and other Canadian exporters are left grappling with the potential fallout. If imposed, the tariffs would have ripple effects across the North American economy, impacting industries that rely on Canadian raw materials.
Zochem’s story highlights the precarious nature of cross-border trade in a volatile political climate, where businesses must navigate both opportunities and challenges to remain competitive.