North America faces a complex web of potential tariffs
With just over a week until new US tariffs are set to take effect, Canadian business leaders say they remain deeply concerned, despite reports suggesting the measures may be narrower than initially announced.
Flavio Volpe, president of the Automotive Parts Manufacturing Association, told The Canadian Press that he sees little reason for optimism. “Until a tariff comes into effect and it affects the US economy ... I’m not confident that anybody is going to be able to push the White House back from what it’s threatening to do,” Volpe said.
The US is expected to impose a series of tariffs on April 2, in addition to duties on certain Canadian and Mexican goods that had been delayed by a month. President Donald Trump also proposed sector-specific tariffs, though recent reports indicate those may not move forward at this time.
However, Volpe argued that with so many tariff layers and shifting policy statements, these reports offer “zero comfort.”
Flexible tariffs
On Monday, Trump announced he would impose a 25% tariff on imports from any country that buys oil and gas from Venezuela. The US will also introduce new tariffs targeting Venezuela itself, all of which are set to take effect April 2.
Matthew Holmes, executive vice-president and chief of public policy for the Canadian Chamber of Commerce, said businesses have been navigating an unpredictable trade environment since the beginning of Trump’s presidency.
“There’s been nothing predictable or consistent about any of this, and that’s part of the point,” Holmes said. “The uncertainty, the constant shifting ground—that is part of the intent. It’s to make it more costly and less attractive to do business outside of the United States.”
“Trump is espousing a flexible approach to tariffs. What does that mean? Well, it suggests that things will be uncertain but at least there’s a chance that things won’t be as bad as feared, maybe,” wrote Neil Wilson, analyst at TipRanks.com, in a note on Monday.
“The point worth stressing today is that flexibility does not necessarily mean good, and it signals more uncertainty and headline risk as the market continues to second-guess what Trump does next.”
Retaliatory measures
Earlier in March, Trump imposed tariffs on steel and aluminum, triggering $21 billion in retaliatory measures from Canada. These countermeasures could further raise costs for Canadian consumers and businesses reliant on American imports.
According to a report from Newsweek, Canada’s retaliation tariffs are set to take effect on Thursday.
Dennis Darby, president and CEO of Canadian Manufacturers and Exporters, said in an interview with The Canadian Press that it is difficult to predict the administration’s next steps. “If Mr. Trump’s goal was uncertainty, he’s achieving it,” Darby said.
Even the possibility of exemptions suggests the US administration recognizes the economic burden tariffs would place on American businesses and consumers, he added.
Holmes agreed, stating that the uncertainty alone is already causing damage. “It’s adding cost to both markets,” he said. “It’s making our market less efficient, less viable, more expensive, slower, and that really just begins to undermine the North American marketplace.”
