Could tearing down interprovincial trade walls help blunt Trump’s tariffs?
Global News
A first round of retaliatory tariffs would cover approximately $37 billion of U.S. imports, a source familiar with Ottawa's plans told Global News on Friday.
Canada’s business community is looking anxiously south of the border as Donald Trump gets ready to take the oath as U.S. president for the second time — and urging governments to get serious about mitigating the impacts by trading more between provinces.
Trump has threatened to impose 25 per cent tariffs on Canadian goods coming into the U.S., with a government source familiar with Ottawa’s plans telling Global News on Friday that if the U.S. acts, Prime Minister Justin Trudeau will announce a rapid consultation period – possibly two weeks – on a first round of tariffs that would cover approximately $37-billion of U.S. imports, with implementation to follow immediately after.
These would be the least painful counter-tariffs, the source said, because they would cause the least economic damage to Canadians.
Depending on how hefty initial U.S. tariffs on Canada are, Trudeau may also announce consultations on tariffs covering another $110 billion or so of American goods, the source said.
The economic crisis that Trump’s tariffs would cause has some experts calling on Ottawa to tear down barriers that make it hard for one Canadian province to trade with another.
Fen Osler Hampson, co-chair of the Expert Group on Canada-US Relations at Carleton University, said Canada’s provinces have a chance to turn crisis into opportunity. He said one way of doing that would be to remove barriers that hinder interprovincial trade.
While the volume of trade between Canada and the United States is worth over $960 billion, Hampson said eliminating some trade barriers might offset some of the impacts of Trump’s tariffs.
“They’re saying comprehensive tariffs could reduce Canadian GDP anywhere from two per cent to four per cent,” he said.
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