THUNDER BAY – A tariff war between Canada and the United States is expected to heavily impact both manufacturing and the resource sectors, according to Livio Di Matteo, an economics professor at Lakehead University. He emphasized that Canada would suffer the most due to its reliance on U.S. markets for exports. With tariffs imposed, the economic repercussions for Canada could be severe, while the U.S. would also face consequences.
Di Matteo highlighted that a potential 25% tariff on Canadian imports would directly affect their export sector, leading to a subsequent GDP decline and job losses. In retaliation, should Canada respond with similar tariffs, consumers would feel the price hike for American goods, compounding the economic strain. “It’s certainly not a win-win situation — it’s not a situation that you really want to get into,” he stated, underscoring the challenges faced.
The intertwined economies of Canada and the U.S., developed steadily over the past decades through reduced tariffs, are at risk of disruption due to President Trump’s proposed trade barriers. Di Matteo lamented how such tariffs could disrupt established supply chains. “That’s going to cost them also, but we will feel it more given we are more trade dependent than the Americans are,” he warned.
In response to the tariffs, Canadian Finance Minister Dominic LeBlanc announced intentions to impose 25% tariffs on $155 billion worth of U.S. imports. Provincial leaders like Ontario Premier Doug Ford have vowed to act against American products, showcasing a unified stance on this issue.
Di Matteo acknowledged the inevitability of retaliatory tariffs from Canada, comparing it to standing up to a bully despite the imbalance of power. “Economically, if the Americans impose tariffs, you actually compound the damage by responding with tariffs,” he explained. Nevertheless, he stressed the complexity of politics versus economics, advocating for a retaliatory response that minimally impacts Canada while still addressing the harm from U.S. actions.
A looming tariff war between Canada and the U.S. threatens significant impacts on both economies, particularly in manufacturing and resource sectors. Lakehead University economist Livio Di Matteo warns Canada could face severe consequences due to its heavier reliance on U.S. export markets. While retaliatory tariffs may be politically necessary, they risk compounding economic damage for both nations.
In summary, a tariff war between Canada and the U.S. poses serious risks to both economies, especially for Canada due to its export dependency. While tariffs could lead to increased consumer costs and economic downturns, Canadian officials face political pressure to retaliate. Ultimately, the intertwined nature of their economies adds to the complexity of this looming trade conflict, necessitating careful consideration of responses to avoid deeper economic disruption.
Original Source: www.nwonewswatch.com
