President Donald Trump is threatening to impose 25 percent tariffs on imports from Mexico and Canada on February 1st. Northern border interests say that would hurt not only the economy of the region, but also a long-running relationship.
Canadian officials are pledging to counter any tariffs imposed by the U.S. Outgoing Prime Minister Justin Trudeau said Tuesday the U.S.-Canada trade relationship has been one of the most successful in the world.
“Canadian energy powers American manufacturing, businesses and homes. Of America’s top 5 trading partners Canada is the only one with whom the United States runs a trade surplus in manufacturing. And Canada buys more goods made by Americans than China, Japan and Germany combined,” Trudeau reported. “We stand at the ready to work with the United States to create a booming and secure North American economy.”
But Trudeau warned if tariffs are imposed Canada will retaliate.
“We will protect our national interests while we protect the most successful economic and security relationship the world has ever seen. I and my cabinet will continue to work with leaders across the country who have stepped up to unite in defense of Canadian workers, Canadian businesses, Canadian sovereignty,” promised Trudeau.
Importers and exporters are preparing for potential tariffs from both countries as Canada maintains it will impose dollar-for-dollar tariffs if the U.S. implements a 25 percent tariff.
AN Deringer is a customs brokerage firm based in St. Albans, Vermont that consults with importers and exporters across the country. Director of Compliance and Customs Affairs Amy Magnus says the potential imposition of tariffs is very troubling for many of their clients on both sides of the border.
“Some may not survive. The smaller companies that didn’t prepare they may find themselves in a world of hurt or they may choose to sell their products elsewhere. I mean, that’s the other option: don’t sell to the United States,” Magnus said. “Sell to other countries that maybe have more favorable trade agreements. I find the Canadians to be very savvy traders and they, of course, have a lot of natural assets. They have water. They have oil. They have a lot of good stuff that everybody wants. So that’s another strategy if they find that dealing with the United States becomes too difficult.”
North Country Chamber of Commerce President Garry Douglas notes that U.S.- Canada trade is the driving force in the regional economy.
“The Chamber estimates that if you take all the different ways that we interact just on Clinton County, New York it’s well in excess of $1 billion a year. Now you don’t mess with that,” asserted Douglas. “If you were to slap a 25 percent tariff on everything that crosses the border February 1st, you would knock 1 percent off the GDP of the U.S., in fact probably more than that, and upwards of 3 percent off the GDP of Canada pushing them into recession. Now, you want to put Canadians into a recession, do you not think that’s going to affect cross border shopping and tourism? It now starts to affect our entire cross-border business activity if that were to happen.”
Douglas says they are assessing local companies and have found that at least two have suspended plans for expansion due to tariff concerns. Others are stockpiling supplies sourced from Canada. Douglas reports another manufacturer will have difficulty obtaining needed raw materials and is considering layoffs if tariffs are imposed.
