TUCSON, Ariz. (13 News) – Canada began imposing retaliatory tariffs Tuesday on roughly $20 billion worth of American goods, including steel, dairy products, appliances, and farm equipment.
The new tariffs cover a range of goods beyond industrial products, hitting everyday purchases such as seafood, cheese, clothing, cosmetics and toilet paper, with some facing duties as high as 50%.
Milk, perfume and clothing face 50% tariffs, cheese, carpets and appliances face 25% tariffs, and industrial equipment gets a 15% tariff.
There are no talks set to end the trade war.
Canada is Arizona’s third-largest trading partner, with nearly $2.6 billion in goods traded back and forth each day.
Experts said the tariffs implemented so far have had a minimal impact, but they warned consumers could start to see increased prices as time goes on.
Arizona’s trade relationship with Canada
Arizona imports nearly $3 billion in goods from Canada every year and sends back roughly the same amount.
Ed Ackerley, with the University of Arizona’s Eller College of Management, said Arizona will soon feel the impact of the new tariffs.
“A 50% tariff on certain products, especially those components, is going to have a damaging effect on the economy here in Arizona,” Ackerley said.
Those components include raw materials like steel and aluminum, aircraft parts, agriculture and electronics, among others. Ackerley said those industries haven’t been impacted yet, but he worries long-term uncertainty could reduce demand in Canada and slow economic growth at home.
“What’s probably most troubling for businesses is the expectation of: are these going to last, is this retaliation going to continue, is it going to escalate, do we need to be charging more, do we need to be charging less?” Ackerley said.
Small businesses expected to feel effects first
Glenn Williamson, CEO of the Canada-Arizona Business Council, said smaller businesses will feel the effects of tariffs first.
“The people that are going to feel the fastest hurt on this will be small entrepreneurs. Those are the people that concern me more than anybody else,” Williamson said.
Ackerley believes that will eventually lead to increased costs for consumers.
“Down the line, there will be an effect on prices, and this is on top of effects of the war, any effects of inflation, any effects lingering from COVID, if you will,” Williamson said.
Concerns over supply chain disruption
Ackerley and Williamson said tariffs could disrupt the global supply chain for industries based in Arizona, including aerospace, defense and electronics manufacturing, which Ackerley said rely on strong trade partnerships for their success.
Williamson also added that agriculture and produce are among southern Arizona’s biggest exports, and one Canada heavily relies on.
“It’s very damaging in the short term where we have great partnerships that have been developed over centuries,” Ackerley said.
Ackerley said he hopes to see an end to the retaliatory tariffs and an agreement between both countries that benefits Arizonans.
“Right now we’re suffering from both countries perhaps holding their ground and using politics as a way to fight this war, and the bottom line is the effect is higher prices for consumers,” Ackerley said.
Williamson said Arizona still has a strong relationship with Canadian companies and tourism, and doesn’t expect this latest round of tariffs to impact those sectors.
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