In a bold move by U.S. President Donald Trump, Canada is now facing its most significant trade threat yet with a proposed 50 per cent duty on a wide range of Canadian goods effective August 19. Businesses nationwide are racing against time to prepare for the impact.
Breaking down the potential repercussions, three charts highlight the sectors at risk, the provinces most vulnerable, and the expected effects on both sides of the border.
The electronics sector is poised to bear the brunt of the tariffs, with Canada exporting over $4 billion US worth of electronics equipment subject to the new tariffs. Additionally, items such as certain electrical boards and controllers, constituting the largest export category to the U.S., are on the list.
Canada’s plastics industry, encompassing items like bottles, floor coverings, and household goods, could also suffer, with threatened items valued at around $3 billion US.
The extensive list of more than 500 threatened items is linked to three proclamations from the White House, targeting well-known trade issues including provincial alcohol restrictions, Canada’s protected dairy sector, and the integrated auto industry. Notably, passenger cars and trucks are not included, but motorcycles, mopeds, and some components are.
Moreover, nearly $900 million US worth of Canadian beverage exports to the U.S. are under threat.
Analyzing the impact across Canada, British Columbia would face a disproportionate hit from the import duties, primarily affecting items like wood and paper, which represent over 13 per cent of the province’s total exports to the United States, the highest among all provinces.
Quebec is also at risk, with approximately 10 per cent of its exports potentially exposed to the tariffs, exacerbating the existing 50 per cent duties on steel and aluminum that have already affected the province.
Conversely, only about one per cent of Alberta and Saskatchewan’s exports to the U.S. are under threat.
Given Canada’s heavy reliance on the U.S. as a trade partner, such tariffs could deal a significant blow to the Canadian economy, affecting nearly four per cent of total exports worldwide with a 50 per cent surcharge.
While the U.S. will also be impacted, the effects may be less severe due to the country’s economic size and diversity. The tariff list represents approximately half a per cent of total global imports, with research indicating that consumers ultimately bear the costs of tariffs.
Utilizing an obscure 1930s law for the first time, Trump wields the authority to implement these levies, raising concerns about the implications on trade relations.
Unlike previous tariff disputes with the U.S., there are no exemptions for items covered under the Canada-United States-Mexico Agreement (CUSMA), as negotiations continue. Following the tariff threats, Prime Minister Mark Carney engaged in trade talks intensification with President Trump.
Source: CBC News