The White House needs to hear recently that they’ve come under serious fire. Over the last two months, it has repeatedly changed, postponed, or canceled its tariff announcement. NEWPORT, RHODE ISLAND – In the past few days, US President Donald Trump and Canadian Prime Minister Mark Carney have spoken on the phone. Carney and Bass both characterized their conversation as “productive.” Their negotiations, scheduled to begin after the federal election, are intended to resolve a long-standing dispute that has roiled trade between the two countries. What comes from these discussions will be crucial to ensuring the U.S. and Canada’s economic and security relationship remains mutually beneficial.
Given that just a few weeks ago, Trump announced his intent to impose highly protectionist 25 percent tariffs on imported vehicles, the uncertainty is understandable. Ford has had strong assurances that vehicles comprising a majority U.S. aren’t subject to these tariffs won’t be. This surprise decision is something of a lifeline for automakers. Economists and the Bank of Canada have been on guard. They ominously predict that sweeping tariffs imposed this year might push the country into a looming recession. In retaliation, Canada placed 25 percent tariffs on US exports. Together, these tariffs have impacted roughly $60 billion of American goods since early March.
The U.S. has warned of further tariffs on $95 billion in goods unless negotiations move in their favor. Following his reported tête‐à‐tête with Trump, the Canadian PM was quick to declare a “new economic and security relationship.” He’s hoping to find some measure of stability through negotiations he has pledged to undertake.
“The constant drumbeat of tariffs — it’s going to be on this date, no it’s going to be on that date … now we’re doing a surprise one this week, just cause — is unpredictable and stress inducing.” – Matthew Holmes, head of public policy at the Canadian Chamber of Commerce
The commercial world has felt the damaging effects of this chain of events. Even Matthew Holmes admitted to a stark drop in business activity after tariffs were imposed. Most significantly, companies are pulling the plug on planned launches in the U.S. and Canada. Consequently, the hope of adding new projects or expansions has been completely frozen.
Last week the U.S. trade representatives petitioned their Canadian counterparts in Ontario. They claimed to have introduced new tariff categories, such as “medium” tariffs and a new designation for “China.” New tariffs could be imposed on some compliant items. The current suspension on tariffs for compliant items expires on April 2. Now businesses are left waiting to see what changes await.
“But it paralyzes investment decisions, it adds to prices, there are already job losses, there are already cancelled contracts.” – Goldy Hyder, CEO of the Business Council of Canada
The unpredictability of these tariff schemes have business leaders hanging on edge. Christopher Reynolds of The Canadian Press pointed to the stormy road ahead. He called on stakeholders to be ready to tackle unforeseen implementation challenges in the weeks and months ahead.
“Maybe we’ll be fine in four years from now, but I think the path there will be turbulent. We just have to fasten our seatbelt and, honestly, nobody really knows what the next weeks, months are going to bring.” – Christopher Reynolds, The Canadian Press
Dennis Darby, CEO of the Canadian Manufacturers and Exporters industry group, pointed out the damage to jobs. He noted a massive drop off in hiring. One-third of these companies have already begun eliminating shifts, reacting to the instability created by potential tariff threats.
“Now nobody’s hiring. In some cases, they’re cutting shifts.” – Dennis Darby, CEO of the Canadian Manufacturers and Exporters industry group
