Consumers in Canada could be facing higher prices for some goods if newly announced U.S. tariffs go into effect next month, some experts and businesses say.
This comes after U.S. President Donald Trump threatened new tariffs Monday evening of up to 50 per cent on some Canadian imports that may have otherwise been shielded by terms in the current Canada-United States-Mexico Agreement (CUSMA).
Trump signed three executive orders on Monday, each one using a different justification for the new tariff: the provincial and territorial boycotts on American alcohol products, Canada’s retaliatory tariffs on U.S.-made vehicles and auto parts and quotas on American dairy imports under Canada’s supply management system.
Within each executive order is a detailed annex listing hundreds of other products that could be subject to the 50 per cent tariff. This includes various plants and produce, wood and paper products, clothing and textiles, electronics and components, dog leashes and harnesses, floating docks, swimming and wading pools and even hockey sticks.
In response to the tariff announcement, Prime Minister Mark Carney on Tuesday said “we will look at all options in terms of how we would respond if they do come into effect.”
Those tariffs could go into effect after the deadline on Aug. 19.
Who pays the tariff?
When countries like the United States apply tariffs to specific goods from specific countries, it means there is an added cost for American consumers and businesses when they import those products.
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While the tariff is paid by the importing business or individual, those costs typically get absorbed into general prices as businesses pass higher costs onto consumers.
In the case of these new tariff threats, Trump is targeting more goods made in Canada and imported into the U.S., which means Americans importing tariffed Canadian goods have to pay more to do so.
“The sticks that we’re selling for a certain price are now going up in price because of the tariffs,” says Jeffrey De Belle, president and founder of Custom Hockey Sticks.
“It almost feels like a bit of a shot at us Canadians and the hockey people.”
When faced with these additional costs, businesses must make a difficult decision. They must either absorb the added fee, which can eat into profits, reduce costs elsewhere to offset those costs, or pass all or a portion of those added fees onto the consumer.
This means U.S. consumers could ultimately be paying higher prices for goods made in Canada as the result of new tariffs.
“It’s going to be tough because prices are just going to skyrocket,” says De Belle.
“We’re basically going to put a line item 50 per cent tariff on our website to cover these costs and, are they going to buy still? We’ll see.”
How Canadians could see higher prices
Even if the immediate cost increases are felt in the U.S., experts say Canadians could still feel effects.
John Boscariol, a partner in the international trade and investment law group at McCarthy Tétrault LLP, says there are two scenarios where Canadians could see higher prices if the tariffs go through in 29 days.
“As these tariffs are imposed on products going into the United States, some of these products on the list go into manufacturing in the United States,” he says.
“And so U.S. products become more expensive as a result. And to the extent that Canadians are importing those U.S. products into Canada, we could see price increases there.”
This means Canadians could face higher prices from products that cross the U.S. border multiple times and get hit with these new duties.
For example, one of the products targeted by Trump’s new 50 per cent tariff threats is plywood and wood veneer sheets.
If a U.S. furniture manufacturer imported these products from Canada, then they would face additional duties from those tariff policies.
Once the wood is manufactured into a finished product, like a cabinet, if a Canadian customer wants to order it, they may face a higher price compared to before the tariffs. That’s because the manufacturer had to pay for tariffs on their end first, and may have passed those additional costs onto the customer.
Boscariol says Canadians could also pay higher prices if Canada responds to this latest threat with more counter-tariffs.
“The second potential impact is it really depends on how Canada responds to this latest threat. If there is a push on the Canadian side to reimpose retaliatory tariffs, it will make products more expensive for Canadians.
With a file from Global News’ Adriana Fallico
Trump “negotiates” with threats, violence and extortion. Get rid of the orange crime boss. GIDA
Embargo the entire US until they get rid of the low-intelligence orange man – GIDA
I agree with Dump the Trump that Trump is trying to cripple Canada so we would be easier to absorb into the US. After all, he said that was what he was going to do.
If he doesn’t TACO and actually puts those 50% tariffs on Canadian goods, we should put an export tax on the items he is not tariffing because the US really needs them: energy (oil & gas, but also Ontario and Quebec electricity), potash, and critical minerals.
Yes, that would really badly hurt our economy, but so would 50% tariffs. Enough is enough!
Canadians are smart. We can avoid the extra costs of Donald Trump’s tariffs by simply not buying American made products. Boycott all American products.
WHY Trump wants our dairy quota system to end is because he is fighting to save american dairy farmers. Instead of increasing the cost of dairy in the USA Trump wants Canada to allow MORE DAIRY into Canada and I thought last time around when Justin Trudeau and Trump agreed to CUSMA our dairy cost would go down IF more american dairy came into canada, not realizing how many MILLIONS AND MILLIONS of OUR OWN DAIRY MILK FROM QUEBEC THAT HOLDS 95% AND MAYBE MORE DAIRY QUOTA in Canada, GETS dumped TO KEEP PRICES HIGH for QUEBEC DIARY FARMERS. Milk went up yet again in June – and millions more gallons of milk got dumped to save Quebec dairy farmers high incomes (I read they make about $165,000.00 even after ALL THEIR COSTS are paid).
Stop exporting potash, minerals and oil to the U.S .
There are other markets for those.
No tariffs because we are the one to pay for it as consumers . Let’s not do the same mistake the orange/orangutan is making.
Already not buying anything that comes from USA.NOT going there anymore since he was elected
@Derek While I agree that Canada should be selling finished product rather than raw materials, the reason it went the way of exporting raw materials was because wages and benefits as well as government regulations created a finished product that was way too expensive for the US market and they could have obtained finished goods elsewhere cheaper. The only way to get our product accepted was in raw form so they could use their cheaper labour and with less government interference in the USA.
An overlooked option is alternative supplier. When goods are priced higher, alternative suppliers can find their similar goods becoming competitive.
Avoid buying american as much as possible.
We are Canadian.
The tariffs will effectively force American businesses to find a cheaper product elsewhere and Canada will suffer because of that lost trade. Jobs will be eliminated and Canadian working class families will suffer. The great Trump whisperer Carney failed yet again.
Canada should in the long run, stop exporting raw materials to be reimported later as finished goods. The export of ore, energy, should stop, and only refined and processed material, should be exported, preferably in the form of finished goods. In the short term, export of unprocessed material could go to other markets, transitioning to hard-goods. Appliances, many vehicles, ships are not rocket science, and we are importing them. A $20,000 high end range has about $1000 worth of metal,, $50 worth of electronics.
It’s so obvious Trump is trying to cripple Canada so we would be easier to absorb into the US. We need to stay strong until he is out of office… Assuming the Republicans don’t rig another election (because they definitely rigged the 2024 election, or at least, I see no reason why we shouldn’t use Trump’s own strategy of lying against him)
Stop US travels. Stop buying US products. Stop bringing US goods. Start cancelling online subscriptions such as Disney and Prime. US used to be great place to visit but Trump just keeps building a fortress that made the country no longer safe, friendly, and happy place it used to be in the whole wide world.
LOL! Such a dumb president. Only MAGA cult here and the US believe his lies.
It is the US consumers who face price increases from Trumps tariff’s, not Canadian consumers. Canadian consumers face price increases from retaliatory tariffs Canada puts on.
@me again
That what you cannot wait for will probably take 100 years or so
How long do you plan to live
LOL
These are wrak explanations of the impacts of tariffs.
Get it through your thick skulls – Canadian businesses need the US market to stay afloat.
These businesses cannot simply charge more to US customers, they will need to charge all customers more or face bankruptcy.
I cannot wait for the day we have deals with other countries and can turn off the oil pipeline to the USA and switch off the power.
We need to get all the grocery stores to stop bring in US produce. I am one that checks where it comes from and will do without purchasing if it comes from US.
With this new 50% tariff I would ask the BIG CHAINS TO STOP BRINGING PRODUCE FROM THE US FULL STOPPPP
Thank you for reading these comments.
CUSMA is newer than the law Trump is trying to use. so courts will agree that items covered by CUSMA will be exempt from Trump’s tariffs, even if they are allowed to stand.
The tariff’s are not absorbed. they make the prices go up.Wrong word.
Yes, Furniture, made in the US, from Canadian lumber will go up in price. That will be good for Canadian furniture industry… I find it sad that I can order a sauna, built in China, with Canadian Hemlock or cedar, cheaper than I can order one from BC. – We need to be more self sufficient.
Let’s just stop sending them the products they rely on. See how well their produce and fruits grow without our potash!