Get ready to pay more with increased tariffs; that’s how the average Canadian will be affected.
United States President Donald Trump imposed a 25 per cent tariff on most Canadian imports on Tuesday, stating there’s “no room left” for negotiations.
Our newsroom spoke to the president of an economic development planning and consulting firm to find out what the impact will be.
“We import hundreds of billions of dollars worth of goods and services every year. Everything from food to cars to televisions to clothing. Almost all of that is imported to the country,” said David Campbell, the president of Jupia Consultants.
“What we do is we export the stuff we’re good at to offset the cost of all those imports. So, we export energy, we export manufactured products, wood products, some food products.
“What happens is, when Trump puts on a tariff, it either significantly reduces our exports, or because we’re doing what’s called countervailing tariffs on the stuff coming in from the U.S., we’re going to have to pay a lot more for imported tomatoes and strawberries from California and orange juice from Florida, etc.”
He says everybody loses because things get more expensive up and down the supply chain.
“The most damaging part of this whole thing is that many companies in Canada that rely on the US for markets will either go out of business, significantly reduce their output as a company, or be forced to move to the United States,” Campbell stressed.
He adds it’s likely that the country will be tipped into a recession at some point in the future.
“The federal government doesn’t have a lot of fiscal room to put a lot of stimulus on the table because we’ve been running a lot of deficits now for many years, so we don’t have a lot of government room to inject spending into the economy.”
Campbell says tariffs lead to increased costs and lost economic activity because when goods are exported into the United States, the money comes into Canada and is turned into wages and spending in the local economy.
“So every industry, from grocery stores to movie theatres, everybody’s affected by the negative impacts of a tariff like this. Not only are prices going up, it’s going to be a higher cost of living and a lot of our key industries will suffer from a lack of or less business,” Campbell stated.
He adds that there are some places that are going to be hit harder than others by these new Trump policies.
“Halifax, for example, has very little direct exposure to the U.S., whereas Saint John, New Brunswick, is the most exposed city or urban centre in the country, if you look at the share of economic activity tied to exports to the US. I would say there are no winners, but there’s certainly going to be certain communities are not going to feel it as much,” Campbell stressed.
Prime Minister Justin Trudeau announced Tuesday that Canada is imposing retaliatory tariffs against the United States, with a 25 per cent tariff being applied to $30 billion worth of products immediately and to others in 21 days.
Trudeau adds that Canadian tariffs will remain until the U.S. government lifts their tariffs.
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