The threat by U.S. President-Elect Donald Trump to slap a 25% tariff on all Canadian goods has sent shockwaves throughout the Canadian business community.
“Being America’s “nice neighbour” won’t get us anywhere in this situation. President-elect Trump’s intention to impose 25% tariffs signals that the U.S.-Canada trade relationship is no longer about mutual benefit. To him, it’s about winners and losers—with Canada on the losing end,” said Candace Laing, President & Chief Executive Officer of the Canadian Chamber of Commerce.
“We’re facing a significant shift in the relationship between long-standing allies. Canada’s signature approach needs to evolve: we must be prepared to take a couple of punches if we’re going to stake out our position. It’s time to trade “sorry” for “sorry, not sorry.”
Karl Littler, Senior Vice President, Public Affairs, for the Retail Council of Canada, said there are very serious concerns with President-elect Trump’s threat to impose tariffs on imported goods from Canada.
“As an exporting nation, with over 75% of our exports destined for the US, new tariffs could hit the Canadian economy hard—impacting jobs, household incomes, and thereby reducing affordability for retail goods,” he said.
“Another major concern is the potential for a “trade war” between Canada and the US, which could trigger retaliatory tariffs. RCC would strongly advocate against placing this burden on Canadian consumers, especially amidst existing affordability concerns. We are particularly concerned that, in the event of a trade war, a broad range of retaliatory measures from the Canadian government could target US-sourced grocery items, due to our heavy reliance on US food imports, as well as other consumer goods. So from our perspective, a trade war should be avoided at almost any cost, though this is hardly news to the Canadian government.
“In 2017, work done for the Retail Council of Canada by the consulting firm AT Kearney estimated that each one per cent of tariffs on US Goods could increase retailers’ costs by $1 billion, a number that would now likely exceed $1.25 billion per percentage point of tariffs, given inflation and population growth.”
Dan Kelly, President and CEO of the Canadian Federation of Independent Business, said the tariff announcement has already sent shockwaves through Canadian markets. Whether it’s 10% or 25% – blanket tariffs on Canadian goods would have a massive economic impact on our economy,” he said.
“Small and medium-sized businesses account for approximately 40% of exports to the US. Any disruption to the flow of goods between the US and Canada would be a major economic hit. Tariffs would not just affect our exporters as their effect on the value of the Canadian dollar would increase the cost of US imports — affecting small businesses and consumers alike.
Canada cannot afford to dismiss this as a idle threat or initial positioning – we need to take this seriously and present, once again, a united front in responding to this challenge. The uncertainty alone created by this issue will cause pressures on Canadian SMEs and impede our progress to an economic recovery,” explained Kelly.
“Our governments must take all actions within our control to ensure we are a good and reliable trading partner for the US and the world. These include a stronger focus on crime, stabilizing our supply chains such as ports and railways, promoting our energy sector and reducing the regulatory and tax burdens facing Canadian businesses.”
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