The administration of President Donald Trump has recently announced that they will soon enact tariffs, which has made Canadian industries extremely nervous. The threat of sector-specific tariffs, as proposed by U.S. President Donald Trump, has business leaders worried. New punitive tariffs are scheduled to go into effect on April 2, 2018. Other sectors that rely heavily on exports to the U.S. are gearing up for a huge blow. This uncertainty is especially worrisome for industries such as automotive manufacturing, which is highly interconnected throughout the U.S. and Canada.
President and CEO of Canadian Manufacturers and Exporters, Dennis Darby, reacted with caution to the U.S. administration pronouncements. He noted that the administration is trying to raise the cost of doing business abroad. Furthermore, they are trying to discourage companies from operating internationally.
“If Mr. Trump’s goal was uncertainty, he’s achieving it,” said Dennis Darby.
President Trump is already talking about punishing countries with a 25-percent tariff on imports from any countries that buy their oil and gas from Venezuela. This decision further complicates the picture. New tariffs will be imposed on Venezuela proper, introducing yet another layer of complexity for Canadian businesses to navigate.
Matthew Holmes is executive vice-president and chief of public policy at the Canadian Chamber of Commerce. He stressed all of the unexpected variables at play.
“From the very beginning … there’s been nothing predictable or consistent about any of this, and that’s part of the point,” stated Matthew Holmes.
He added that wide-ranging tariffs are still anticipated in the coming weeks and months, reinforcing the uncertainty faced by Canadian exporters. American consumers could decide to purchase less stuff. They would be forced to use U.S. substitutes instead, which would worsen the effect on Canadian industries.
Flavio Volpe, president of the Automotive Parts Manufacturing Association, voiced concerns about President Trump's actions, particularly regarding the auto sector.
“The fact is, the president has threatened multiple layers and types of tariffs on Canada and specifically for the auto sector, and the idea that they may be willing to put some off, while still talking about putting a universal tariff on Canadian goods on April 2 is zero comfort,” remarked Flavio Volpe.
Volpe further stressed that these tariffs might destroy the long-term prospects of automotive giants such as General Motors and Ford.
“He’s putting the future of General Motors and Ford at risk,” he added.
The potential new retaliatory tariffs are of great concern to producers and processors alike. If so, US-made goods will face increased costs borne out in the form of higher prices to consumers. This proposed runaway escalation would be enormously disruptive to Canadian businesses and consumers alike.
