Faced with the tariffs imposed by the president of the United States, Donald Trump, some countries have responded, so far, returning the other cheek and not taking reprisals with their own duties.
Canada, however, continues to hit the commercial war with its neighbor to the south. But it also raises the question of whether Canada absorbs the blows of US tariffs, although painful, could be preferable to the general economic damage of a large -scale commercial conflict.
It is a problem, perhaps as expected, on which economists have variable opinions. Some say that Canada has no choice but to retaliate, even if imposing tariffs on US goods will increase Canadian prices. But others suggest that these movements can have little impact on the United States
Werner Antweiler, associate professor and president of International Trade Policy at British Columbia University, says Ottawa was right to return the fire.
“Repliations are really necessary, although it is harmful to our own economy, because it makes prices higher for Canadian consumers and companies,” he said.
But Pau S. Pujolas, associate professor or economy at McMaster University, says he thinks Canada does not need to spend his time “fighting the rate with the rate.”
The Minister of Finance, Dominic Leblanc, describes the plan of the federal government of slapping tariffs on US assets worth $ 29.8 billion to contract the president of the United States, Donald Trump, after imposing tariffs on steel and Canadian aluminum.
Instead, he says that the economy would be better to help eliminate interprovincial commercial barriers and unravel the bureaucracy that hinders some of Canada’s trade agreements with other countries
“Frankly, I would say, look, that Americans shoot in their foot, allow them to destroy their companies … that depend on Canadian products, that destroy all that. And let’s move on.”
‘Forced to retaliate’
Like any tariff, Canada’s reprisals against the United States almost completely fall from Canadian consumers, and will damage the economy here, not there, says Trevor Tombe, professor of economics at the University of Calgary.
“That does not mean that we should or should not do them, only that the decision to make reprisals should be firmly based on achieving non -economic objectives,” as in the political sphere, he said.
He sees reprisals as “more a political action to shape conversation, narrative and public relations campaigns”, against, in this case, the Trump administration.
They have a limited capacity to affect the economy of the United States, he said in an email to CBC News.
And yet, Canada said Wednesday that it would retaliate with tariffs on US goods worth $ 29.8 billion after Trump imposed tariffs on all imported steels and aluminum. That adds to tariffs on US goods worth $ 30 billion already collected after Trump’s initial tariffs last week.
Meanwhile, Ottawa has threatened tariffs on additional US goods of $ 100 billion if Trump pushes his reciprocal rates on April 2.
“I think Canada feels obliged to retaliate,” because it is based on the US market that Trump has attacked, said Peter Morrow, an associate professor of Economics at the School of World Affairs and Public Policies of Mock of the University of Toronto.
“Approximately 90 percent of Steel or Canadian aluminum exports go to the US. Uu. So Canada really can’t sit and do nothing. Canada has to develop some negotiation position.”
However, some countries such as the United Kingdom, Australia and Mexico that have refrained from reprisals have their own reasons not to pull the trigger in the rate, says Antweiler.
The United Kingdom, for example, is looking for new commercial agreements after Brexit and, more importantly, a free trade agreement with the USA, says. In addition, the government of Prime Minister Keir Starmer is looking for some kind of agreement with the United States with respect to Ukraine, so he does not want to alienate Trump.
The Minister of Foreign Affairs, Mélanie Joly, directly appealed to the Americans, urging them to speak with their elected officials at all levels and ask them to send a message to the White House to end the commercial war.
Starmer has said that while all the options are on the table, he would take a “pragmatic response” and would not return the return after the United States slapped tariffs on steel and aluminum imported from any country.
In Trump’s first mandate, Australia was able to obtain an exemption from the tariffs that he imposed in 2018 and may be waiting to obtain another to this last round, says Antweiler.
Derek Holt, vice president and chief of economy of the capital markets of Scotiabank, adds that countries such as the United Kingdom and Australia are not in the same situation as Canada.
“It is easier for Australia and the United Kingdom Put the other cheek because they have much less at stake, given less exposure to trade with the United States,” he said in an email.
Around a fifth of the United Kingdom’s exports go to the United States and a good part of that is financial services, he says. Australian exports to the US are only about four percent of their total exports.
Diplomatic incursion
Although Trump turned Canada and Mexico into the objectives of his initial tariffs, Mexican president Claudia Sheinbaum seems to have made diplomatic incursions with him, while relations have remained frost between Canada and the United States.
Ottawa has a free trade agreement with Washington and has remained in conversations, trying a diplomatic solution, as this crisis was developed, says Sylvanus Agesorgbor, associate professor at the University of Guelph in the Department of Food Economics, Agricultural and Resources.
That is why Affesorgbor believes that reprisals are “very justified.”
“There is nothing we can do,” he said. “We have exhausted each negotiation medium. So we are pushed into the wall.”
But he warns that officials must be careful not only to cover all American products with tariffs.
“You must be very selective,” said Ansorgbor, adding that he believes that federal officials have the experience with rates imports that can be replaced by Canadian producers.
For example, it would be a very bad idea to slapped tariffs on US imports on which Canada is really based, as pharmaceutical products, says Morrow. However, something like us makes sense makes sense.
“Canadians will not be so worse. They can still have many options. But American producers have now lost sales,” he said.
“Sometimes it is very obvious. But other times it is quite difficult to say ‘OK, what are the goods where we have other options? And what are the goods in which the United States depends on us for a market?’ “
Until now, Canada is doing well, without imposing blanket rates, dollar per dollar, but focusing on areas that can minimize damage to Canadian consumers, says Antweiler.
“We are seeing sectors where we have easy or substitute domestic substitutes in the third country,” he said. “Everything is really focused on reducing damage.”
