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This article covers key details about What tariffs will really cost Canadians and Americans.
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While tariffs can end up hitting consumers in the pocket, there are other impacts on households.
Import taxes can complicate trade for businesses that have cross-border supply. As well as the higher costs, the uncertainty created by the trade war could put off investment plans and stunt job creation.
Saunders suggests the biggest impact on households may not just be through prices, but job losses instead.
“If you’re, let’s say, a bespoke furniture producer in BC [British Columbia], you’re currentlyfacing a 50% tariff on your exports to the US – that could really shut the enterprisedown. I think that would be more the direct impact on households as opposed to these retaliatory measures.”
Canada’s forest industry employs almost 200,000 people and has called on the administrationto boost domestic demand through federal housing programs to make greater use of Canadian wood, though it admits “no support package can replace reliable access to our largest export market”.
When it comes to US, consumers are unlikely to see much of a difference in terms of the cost of living as result of this latest battle with Canada, but frictions to trade can have longer-term economic impacts.
Such tensions also feed into concerns over the free-trade agreement between Canada, the US and Mexico, known as the USMCA. Both Canada and Mexico have statedthey want the USMCA extended for another 16 years, but the US has statedit will not renew in its current form.
Despite the deal remaining operational, tariffs risk putting off talks in the near future, creating more uncertainty for cross-border trade.
John Iselin, associate director at the Budget Lab at Yale, estimates the cost will only be about $3 per American household on average, but when taking into account Trump’s wider trade war with the rest of the world, and particularly China, the added costs rise to about $1,000 for the average family.
“It’s hard to view this particular instance with Canada in isolation because we’ve had similar interactions with a range of other countries, all of which makes doing enterpriseharder. It’s just another in a series of tariff shocks.”
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