Canadian defence company opens U.S. plant as tariffs loom

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Roshel Inc., a Brampton, Ont.-based manufacturer of armoured vehicles, has opened a new production facility outside Detroit, saying it is committed to “American-built products.”

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The 40,000-square-foot plant in Shelby, Mich., opens about a month before president-elect Donald Trump assumes his second term in office, which is when he plans to impose 25 per cent tariffs on all Canadian products.

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Chief executive and founder Roman Shimonov said the plant will allow Roshel to avoid the worst impacts of the tariffs.

“Definitely, it is related to Trump’s administration and also definitely to potential changes in the way tariffs are working,” he said. “As of today, we are getting most of our orders from the U.S. government.”

But Shimonov said planning for the facility started two years ago, in part because so many of the company’s clients are U.S.-based government agencies or companies and the company purchases many of the materials it uses in the U.S.

Roshel produces armoured vehicles, sometimes by upgrading vehicles such as the Ford F-550, to withstand blasts, bullets and other security threats. The company’s U.S.-based clients include the U.S. Department of Homeland Security and the U.S. Department of State.

Founded in 2016, Roshel initially derived much of its business by making armoured vehicles for cash-and-transit companies as well as local law enforcement agencies.

But Shimonov said that after Russia invaded Ukraine in 2022, Roshel’s business shifted to producing armoured vehicles for military purposes. He said the company has sent more than 1,500 vehicles to Ukraine, but only about 200 or so were donated by the Canadian government.

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“Unfortunately, we don’t get the same level of orders in Canada” as in the U.S., Shimonov said.

Within Canada, the company has more than 400,000 square feet of production space, including a flagship plant in Brampton that it opened in 2023 at a cost of $65 million, he said.

It is not the only company that is closely watching as Trump prepares to implement 25 per cent tariffs on Canadian products. Domestic merchandise exports to the U.S. totalled $548 billion in 2023 and accounted for nearly 77 per cent of the country’s total exports, Royal Bank of Canada said in a report last week.

It flagged the motor vehicle and part manufacturing sector as well as the energy sector as particularly vulnerable to the impact of tariffs, since so much of their exports are destined for the U.S.

The prospect of tariffs has been a contentious issue and one that former finance minister Chrystia Freeland said is a “grave threat” that Canada needs to prepare for.

“That means keeping our fiscal powder dry today, so we have the reserves we may need for a coming tariff war,” she said in her resignation letter to Prime Minister Justin Trudeau on Monday.

• Email: gfriedman@postmedia.com

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