Trump has pledged to impose tariffs on Canada and other countries
Donald Trump will be in the White House again in around one month and US trading partners are becoming increasingly concerned about the impact of tariffs on their economies.
For Canada the potential 25% tariff on its exports, which are likely to be met with retaliatory measures by Ottawa, will hit manufacturers hard according to a new survey from Canadian Manufacturers & Exporters (CME) which says nine in ten goods makers will face significant or very severe impacts.
More than 300 manufacturers took part in the poll. The sector employs 1.8 million Canadians, generates over 60% of exports, and accounts for more than 10% of GDP.
"Tariffs will endanger nearly $600 billion in exports to our largest trading partner, two-thirds of which are manufactured goods,” said Dennis Darby, President & CEO of CME. “These findings show why we need an urgent and coordinated response from governments to protect manufacturing businesses, workers and families. Failure to do so will be devastating for our economy."
In mitigation, almost a third of Canadian manufacturers are ramping up exports ahead of the new administration, but 30% have halted invested and 22% have frozen hiring. Once tariffs are imposed, around half will consider hiring freezes, a pause on planned capital investment, or even moving some production south of the border.
Respondents wants governments to provide tax relief measures, such as deferring or reducing corporate taxes and to offer temporary financial assistance to support employee retention.
China will win
Ontario premier Doug Ford says that if North America becomes engulfed in a trade war then “the only people that win is China.”
Ford made the comments in an interview with Bloomberg in Toronto and has previously suggested that Canada could limit oil exports if there were to be a full-scale trade war. He wants to see an agreement with that would help boost Canadian mineral and energy resources by giving the US greater access which would help the world’s largest economy a strategic advantage in industries where it has fallen behind China.
Meanwhile, Newfoundland and Labrador premier Andrew Furey says that oil and gas should be considered Canada’s queen in a game of chess, and not be put on the table too soon.
