If Canada retaliates against Trump’s tariffs, here’s what you need to know about the potential impact.
Ottawa: So, President Trump is throwing around the idea of slapping a hefty 25% tariff on everything coming from Canada. In response, Canada is ready to hit back with its own tariffs on U.S. goods. It’s a bit of a trade tug-of-war.
Finance Minister Dominic Leblanc mentioned that they’re preparing for all possibilities, especially since it looks like Canada might dodge the tariffs for now. But Trump hinted that these tariffs could kick in as soon as February 1.
Now, how does Canada even impose tariffs? It’s a bit of a maze. Canada has a huge manual—over 1,400 pages—just to figure out the tariffs for different imports. The government can change these tariffs without needing Parliament’s approval every time, which makes things a bit easier for them.
While they don’t legally have to consult anyone, they usually do. They’ve got their eyes on counter-tariffs for about $37 billion worth of goods and might even consider a consultation period of 15 to 30 days. They’re also looking at more tariffs on another $110 billion in goods.
When Canada slapped a 100% surtax on electric and hybrid vehicles from China last year, they had a month-long consultation first. They got feedback from all sorts of folks, including businesses and regular Canadians.
On the U.S. side, they’re also making moves. The Commerce Department is planning to ban certain Chinese software in vehicles due to security concerns, which could change the game for automakers.
Ian Lee, a business professor, points out that changes in tariffs can really shake things up for Canadian businesses. That’s why the Finance Ministry usually talks to people before making big tax changes. It helps avoid a mess later on.
Once the government decides to impose a tariff, it can happen pretty quickly. For instance, they put a surtax on Chinese electric vehicles that went into effect just days later. But it’s not always clear how fast the Canada Border Services Agency can start enforcing these tariffs.
When goods arrive, the CBSA figures out how much tariff is due. They send out notices to importers when rates change, and it’s up to those importers to fill out the right forms.
The impact of these tariffs can vary a lot. Some businesses might eat the costs for a while, while others could pass those costs onto consumers. In the end, it’s the Canadian shoppers who might end up paying more for U.S. goods, not the Americans.
So, while some Canadians might cheer for a tough stance against the U.S., they should remember that it’s their wallets that could take the hit.
