VANCOUVER, British Columbia (AP) – The U.S. threatens to impose 50% tariffs on goods. canadian Experts say the goods will have a knock-on effect on the country’s economy, but could also be used as a negotiating tactic by the U.S. administration.
The new tariff is announced by US President Donald Trump The products covered include honey, alcohol, cement, dairy products, some wood products, hockey sticks, essential oils, perfumes, candles, dog leashes, wigs, and more.
Energy products, potash, fish and critical minerals will be excluded, but items previously protected from import duties will also be included. United States-Mexico-Canada Agreement, or USMCA. The 2020 trade deal was not renewed by the US, starting new negotiations that could last until 2036.
Prince Edward Island Premier Rob Luntz said the tariffs create uncertainty.
“We live in a time where uncertainty is the new normal,” Luntz said Wednesday after a meeting of the country’s premiers and territorial leaders in the capital Charlottetown.
Randall Bartlett, deputy chief economist at Desjardins, one of Canada’s largest financial institutions, said the tariffs would affect about C$28 billion (about $19.8 billion) worth of annual Canadian exports to the United States. This represents about 5% of what the United States imports from Canada each year.
Bartlett said Canada could see growth rates cut by two-tenths to three per cent in 2026 and 2027, but he doesn’t foresee a recession.
“We expect further investment to remain on the sidelines (and likely) to suppress employment, which will also weigh on consumer activity and housing investment,” Bartlett said.
Fen Osler-Hampson, a professor of international studies at Carleton University in Ottawa, said the products subject to tariffs are items that U.S. consumers can decide not to buy if prices rise.
Losing U.S. customers could lead to layoffs at companies employing between 10 and 200 workers, “the backbone of the Canadian economy.”
“This has a knock-on effect on the economy because when people lose their jobs, they don’t spend,” said Hampson, who co-chairs the Expert Group on Canada-U.S. Relations.
Dennis Barbee, president and CEO of Manufacturers and Exporters Canada, said the tariffs would severely harm manufacturers, workers and consumers on both sides of the border.
“At a time when we should be strengthening our common industrial base, these tariffs will raise costs, disrupt production and reduce North American competitiveness,” Barbee said in the release.
British Columbia Premier David Eby said he is frustrated that the United States is considering investing in Canadian mines to secure metals and minerals while proposing tariffs on some Canadian products.
“You can’t have a country attack some families and some workers while wanting access to Canadian resources that the rest of the world wants,” Eby said, adding that if Canada’s position remains unchanged, Canada should restrict access to resources that the United States wants.
Experts Bartlett and Hampson said the tariffs could be a negotiating tactic and may not be triggered. Still, they said Canadian trade negotiators should be cautious going forward.
Hampson warned of retaliatory tariffs and cuts to oil and electricity shipments to the United States.
“You don’t want to poke the bear,” he said. “If we get into a war like that, we will lose. We have a smaller economy. They can absorb the blow much more than we can.”
Hampson said the tariffs may reflect the strained relationship between President Trump and Canadian Prime Minister Mark Carney, which has worsened since Carney took office. He criticized his opponent at the World Economic Forum in Davos.
Mr. Carney spoke about his agreement with Mr. Trump on Tuesday. They agreed to strengthen trade negotiations.
