North Carolina farmers, manufacturers and consumers could soon feel the effects of a trade war between the United States and Canada.<\/p>\n
The United States imposed a 50% tariff Saturday on about $20 billion worth of Canadian goods, including items like liquor, plywood and clothing. The affected goods account for about 5% of Canada\u2019s exports to the United States.<\/p>\n
In response, Canadian Prime Minister Mark Carney said<\/a> Canada would match the new U.S. tariffs dollar-for-dollar starting Sept. 8.<\/p>\n \u201cCountries impose a tariff in order to try to make foreign products more expensive and thereby allowing people, or motivating people in their country to buy those products here,\u201d N.C. State Economist Mike Walden said.<\/p>\n Although tariffs are imposed on goods from another country, the company importing those goods initially pays the added cost, according to the Council on Foreign Relations<\/a>. Importers can take on some of that cost or pass it along to consumers.<\/p>\n For example, if the United States imposes a 50% tariff on Canadian products, like lumber, the American company importing that lumber pays the tariff. The company may then charge customers more, in order to protect its profits, Walden said.<\/p>\n \u201cThe purpose is to try to get people to buy American products, and that will tend to happen, but they\u2019re still paying a higher price,” Walden said.<\/p>\n Canada\u2019s retaliatory tariffs would work the same way. Canadian companies importing American goods would pay the tariffs and could pass some of the cost on to Canadian consumers.<\/p>\n \u201cIn the short run, it\u2019s not good for U.S. consumers and North Carolina consumers who are buying some Canadian products, and it\u2019s not good for North Carolina producers who are selling things to Canada,\u201d Walden said.<\/p>\n