Some trade experts suggest that if Canada seeks retaliation for U.S. President-elect Donald Trump’s tariff threats, the government should attack the U.S. because it would hurt it economically and politically.
“The challenge is to find items that are representative of the United States, that resonate with Trump supporters and his constituencies, and that would get a lot of attention in the United States if Canada imposed tariffs,” Gary said. Hufbauer said. Nonresident Senior Fellow at the Peterson Institute for International Economics.
President Trump has threatened to impose 25% tariffs on Canadian and Mexican products unless the two governments strengthen their borders to prevent drugs like fentanyl and illegal immigrants from entering the United States. The threats raise questions about whether Canada has any influence. Pressure on the United States and prevent such tariff measures.
“What Canada can do going forward remains uncertain,” Scotiabank Economics vice president Derek Holt said in a note to clients.
He said Canada may ultimately feel it has no choice but to retaliate, and “we need to prepare for that risk.”
Wendy Wagner, an Ottawa-based international trade lawyer, said that rather than officials and stakeholders from both countries retaliating, such a complex supply chain meant that U.S. industry would be hit hard by President Trump’s tariffs. He says he wants clarification.
“We can’t all of a sudden get auto parts from Ohio that we used to get from Ontario,” she said.
“Hopefully, many industries can work together to clearly communicate what the impact is and what it means at the level of individual businesses and contractual relationships.”
But if these concerns have no effect on President Trump’s tariff threats, Canada’s leverage with the United States could once again lie in retaliatory tariffs.
During his first term in 2018, President Trump imposed 25% tariffs on Canadian steel and 10% tariffs on Canadian aluminum. Canada responded with its own retaliatory tariffs on a range of U.S. products.
On Tuesday, Finance Minister Chrystia Freeland did not say whether Canada was considering the same retaliatory measures it took in 2018, but said Canada acted “sensibly” last time. He said the retaliation was successful by imposing tariffs on Canada. The ban on Canadian products has finally been lifted.
Freeland also acknowledged that the series of tariffs under the Trump administration had been a difficult time for Canadians.
A senior administration official told CBC News that the main focus for now is maintaining lines of communication with Trump’s inner circle and potentially influential parties. But the official said there appears to be no silver bullet to end the tariff threat at this point, and it will be a long road ahead.
Hufbauer, who has written extensively on international trade, agreed that any retaliatory tariff battle would be more damaging to Canada than the United States. Still, he said there are areas the government could focus on that could make Trump reconsider his policies. threat.
The Canadian dollar was trading at 70.87 cents in the United States early Tuesday, down from 71.53 cents on Monday, following US President-elect Donald Trump’s pledge to impose a 25% tariff on all Canadian imports. did. CBC News senior business correspondent Peter Armstrong takes a closer look at the potential impact of President Trump’s proposals on Canada’s economy.
He said Canada could threaten to impose tariffs on U.S. agricultural products such as dairy products and field crops, which he said is “a very sensitive issue for the United States from a political standpoint.”
Hufbauer also said it might be useful to threaten tariffs on some products related to CEOs with ties to President Trump.
For example, imposing tariffs on iPhones could put Apple CEO Tim Cook in President Trump’s ear, he said. Alternatively, Hufbauer suggested targeting Tesla, the electric car company owned by billionaire Elon Musk, who has become a key ally of Trump.
Hufbauer said anything that could galvanize those around Trump could be helpful.
Canada has a ‘hit list’, needs to focus on ‘counter-leverage’
Trade expert Peter Clark said in a social media post about X that Canada needs to continue to focus on “counter-leveraging” and companies interested in exporting to Canada.
“We know who their senators are and who represents them in the House of Representatives. We have our own target list and our experts are always available. I am ready to do so,” he wrote.
In an interview with CBC News, Clark said these “target lists” refer to U.S. products that could be subject to Canadian tariffs if President Trump were to impose tariffs on Canadian exports. said.
“We know what the product is. We know that there may be people who are worried enough about being put on the consultation list that they’re going to make a fuss with their senators and congressmen to put pressure on them. I know.”
Clark said formal notification of such products as potential targets for tariffs would encourage U.S. suppliers, their lobbyists and Washington lawyers to “get serious about taking action.”
“They’re basically lobbying everyone to avoid that. There’s pressure to the contrary. It may not be enough for President Trump to have that kind of pressure, but it’s been effective in the past. There was.”
Tyler Meredith, former chief economic adviser to Prime Minister Justin Trudeau and Prime Minister Freeland, said the items the government used to respond to President Trump’s steel and aluminum tariffs in 2018 were bourbon and Kentucky-made Trump. He said they were highly targeted in highly visible categories, such as: And Heinz ketchup.
“They just happen to come from a particular area of the United States that President Trump knows and understands,” Meredith said. “So, to some extent, we need to do the same.”
Meredith says some of the players have changed since his first term, and Trump’s interest has grown. The gravitational pull towards other provinces means Canada’s focus will have to change a bit.
“If we actually have to engage in tariff negotiations, it will be important to map out where there are areas where Canada might be able to retaliate.”
carrots instead of sticks
But Meredith also says Canada should focus more on carrots, rather than using tariffs as a whip.
For example, the federal government owns the Trans Mountain Pipeline and the supply contracts with shippers on the pipeline are for Asia, but that doesn’t mean Canada can’t consider entering into agreements with U.S. refineries. No, Meredith said.
“I think that’s something that President Trump would be very interested in,” he said. “He opened the door and said he wanted more of our energy.
“This is all about agreements. We’ll see how we start to put these together, but from Trump’s perspective, it’s like, ‘Well, look, look at what we’re getting.’ It looks attractive in that way.”
