What Canada’s retaliatory tariffs on US goods mean for American consumers
Overnight Tuesday, Canada slapped retaliatory tariffs on billions of dollars worth of U.S. goods in response to President Donald Trump’s taxes on Canadian imports last month.
WASHINGTON —
Canada enacted retaliatory tariffs on billions of dollars worth of U.S. goods, following President Donald Trump’s imposed taxes on Canadian imports last month.
The new tariffs, which took effect overnight Tuesday, target hundreds of American products, including steel, aluminum, clothing, and cheese, in a direct dollar-for-dollar response to U.S. taxes.
According to the Get the Facts Data Team, the U.S. tariffs taxed major Canadian imports like paper, vehicles, and alcoholic beverages. Canada is America’s second-largest trade partner.
Reversely, Canada’s new tariffs impact approximately $20 billion worth of U.S. goods, which experts say is only a fraction of the total U.S. exports sent to Canada last year.
“We’re not going to see an across-the-board increase in consumer prices because the tariffs on the U.S. side only target a small share of everything that Canada sends to us,” Alfredo Carrillo Obregon of the CATO Institute said. “There’s probably going to be discrete products that have higher prices, but this is also dependent on whether manufacturers can source substitute goods from other countries or even from within the U.S.”
While experts agree the impact to U.S. consumer prices may be minimal, the broader concern lies in the uncertainty created by the trade war, as businesses and manufacturers that rely on Canadian imports may need to find alternatives.
“[They’re] probably going to be a little bit more cautious about spending money elsewhere and keeping that cash in hand if it becomes necessary to pay additional taxes,” Carrillo Obregon said. “So, I think the biggest problem is that uncertainty.”
Adding to the uncertainty, President Trump threatened Tuesday to ban sales of Canadian jet maker Bombardier and warned Canada to stop treating the U.S. like a “piggybank.”
By the numbers, the U.S. economy is about 13 times larger than Canada’s, and more than 70% of Canada’s exports go to the U.S. However, experts emphasize the interdependence between the two nations.
“There is a lot of supply chains that rely on stuff that we get from Canada to function,” Carrillo Obregon said. “It’s not just as simple as getting goods from them that we consume here in the U.S. It’s also that our economies are linked together.”
Watch more on Canada’s new retaliatory tariffs: