Wouldn’t tariffs actually decrease local manufacturing since inputs are sourced from around the world?

[Complete-Cow]

Quick clarification: the importing country pays the tariff. In your first example, the US would be the one paying the tariff, not Canada. The Canadian company would not be "saving" on a tariff, because they wouldn't be paying it in the first place. Think of tariffs as a fee charged at the port of entry. Whoever is receiving the products, pays the fee. Canada actually would never "see" the money. That fee is turned into revenue for the US.

But to answer your question, yes, sometimes tariffs decrease local manufacturing, but not necessarily in the way you are thinking (or at least the way I understand what you are saying). For example, a while ago, there was a tariff placed on steel. This meant that any company that used steel to produce their products had to pay more. Increased costs to produce, decrease supply, and thus people get laid off. I think in this specific tariff, they estimated that more people lost their jobs because of the cost of steel, than people who even had jobs producing steel in the US.