YORKTON - The immediate impact of tariffs which are being imposed against Canadian exports may finally be having the hugely negative effects many have feared.
Initially in the face of tariffs imposed by the willy-nilly trade policies of US president Donald Trump Canada has fared rather well.
Many Canadians have taken the ‘elbows-up’ approach when making purchases looking for Canadian produced products firstly – as it should be at all times really – then to products from other countries, and finally only in desperation buying American products.
It’s been effective economically, and has been a positive also in terms of solidarity of Canadians – something we sometimes lose track of – that this nation is better than most and we should have a collective pride in that.
But in the end Canada’s buying power domestically just is not that large.
The ag sector learned that lesson when Canada was forced to eat its way from under a mountain of beef in the years immediately following the discovery of BSE in a Canadian cow in 2003, effectively shutting down most exports for an extended period.
The BSE situation was hugely difficult for the Canadian meat sector which relies heavily on exports.
The current situation is much broader though with Trump basically seeming to want to build a tariff wall around the US banning imports of all things, and with the US being Canada’s major market that hurts.
Making it worse is that China is in a bad mood regarding Canada at present too, and so they have imposed tariffs too – of primary concern to Canadian Prairie farmers ones on canola.
Buffeted by tariffs the Canadian domestic economy will not be able to offset all the hurts.
That has various sectors looking to Ottawa for support, and therein lies the upcoming hurt this country must come to terms with.
The federal government is soon expected to announce promised measures to help the steel and aluminum sector deal with U.S. tariffs.
And last week Prime Minister Mark Carney pledged to introduce new bio-fuel production incentives and provide more than $370 million to assist domestic canola producers, who have been hit by Chinese tariffs.
Of course once the feds announce support for
one or two sectors, others will be lining up pointing out they are being hurt by tariffs too and are worthy of support. Where that ends is a question at present without an answer.
Now maybe, if Premier Scott Moe gets his mission to China off the ground something can be done to smooth Chinese feathers to get the tariffs at least modified. There are certainly indications China sees the weakening of the stature of the United States internationally caused by Trump’s daily rants as an opportunity to flex its muscles internationally. That has them seeming to cozy up more with Russia and North Korea, but it might inch trade doors open too.
As for US tariffs nothing will appease Trump. If you give an inch – like removing reciprocal tariffs – he’ll only expect more concessions. It’s rather clear consultation and negotiations will not work with him.
So the Trump tariffs are going to be long term, and that means whatever support Ottawa comes up with will need to be long term too – and that means costly.
Where such dollars come from without crippling long term debt is another question without a clear answer.
