Canada will be hit with tariffs starting tomorrow, US President Donald Trump said on Friday.
Sources told Reuters that the 25% tariffs are expected to start on March 1 but will include a process for the countries to request specific exemptions for certain imports. However, shortly after Reuters published its report, White House press secretary Karoline Leavitt said it was “false” and that tariffs would be imposed on Saturday, February 1.
Trump first threatened the tariffs back in November, which Canadian politicians initially dismissed as a joke.
With the start date just one night’s sleep away, what does this mean for the everyday Canadian?
Daily Hive spoke with Matt Poirier, vice president of government relations at the Retail Council of Canada (RCC), about how the 25% tariffs could impact food prices and jobs in Canada.
Matt Poirier (RCC)
Will food prices rise in Canada due to Trump tariffs?
Poirier says the short answer is “yes.”
Tariffs are defined as taxes governments put on goods coming in from another country.
“Just as you pay sales tax when you buy something at a store, you may have to pay tariffs or duties on items you import into Canada,” reads an explainer from the government agency Export Development Canada. “If you export goods outside Canada, your international customers may have to pay tariffs on the goods they buy from you.”
Tariffs on imports are usually used to raise the price of imported goods, encouraging a country’s citizens to buy local products instead.
Trump has said he’ll focus tariffs on pharmaceuticals, steel, and computer chips. If he broadens that list, it could raise prices on everyday purchases for Americans.
Prime Minister Justin Trudeau said on Friday the federal and provincial governments are prepared to issue a “forceful but immediate response.”
If that response means Canada imposing tariffs on US products, Poirier says Canadians should expect to pay more for groceries.
“If Canada retaliates with our own counter-tariffs that target some grocery goods, like orange juice, for example, has been rumoured, then all those prices will go up accordingly, too,” he said.
“This is all having a depressive effect on the Canadian dollar…that impacts grocery because this is the time of year when grocers are spending the most importing food from the US, so for produce, mainly. With that lower Canadian dollar, their buying power has already been affected. We don’t even have tariffs, so that’s contributing to increased costs for food. So, yes, we’re looking at this, and we’re really worried for another round of food inflation.”
What products could be hit the hardest?
“If we find ourselves in a tariff, counter-tariff situation, certainly those goods being targeted…their prices will go up significantly, or they won’t be available. So, something like American bourbon might just go dry for a bit, and people will be forced to make alternatives,” shared Poirier.
“If a 25% tariff on all Canadian goods ends up being applied, that is so wide-ranging that our counter punch is going to have to be everything in the kitchen sink, so it’ll be really hard to get exclusions for goods. And certainly, there’s always a priority around excluding manufacturing inputs because of that cross-border integration, which means that it puts even more pressure on consumer goods,” he added.
How are retailers prepping for incoming tariffs?
“Retailers are really good at managing their supply chains and sort of rolling with the punches, but there’s going to be too many punches coming at them if we’re in a tariff war with the US,” said Poirier.
He shared that many tactics retailer already deployed — stockpiling in their warehouse, buying in advance — are lessons they learned from the pandemic on managing their supply chain.
“They can roll out all these great strategies and tactics. But at the end of the day, it still won’t be enough, unfortunately. So, that turns into massive price increases or shortages of certain goods,” the RCC official said.
Will boycotting US products help?
Brett Hondow/Shutterstock
Poirier believes that while the drive to boycott US products is one of the many good strategies Canadians are considering, it may not be effective beyond making a political point.
“Canadian retailers love to sell Canadian goods. They prefer it for a whole bunch of good reasons. It’s easier to source, it’s close, it’s reliable. Unfortunately, of all the products/goods that Canadian retailers sell, Canadian goods are only a percentage of that,” he shared.
“We’ve been sourcing goods, not just from the US, but from around the world for decades, right? Because that’s what Canadian consumers want. It’s one of those things where we’re certainly supportive, but we’re trying to be realistic, too, in saying that we can do this, but it’s not going to completely fix our problem. Probably won’t even come close, unfortunately.”
How else will the tariffs affect Canadians?
Like many other experts, Poirer believes everyday Canadians will bear the real brunt of the incoming tariffs. They will “immediately impact the Canadian economy, which means people might lose their jobs, have less money in their pockets, and have less money to spend.”
“It’s going to be a big deal, and the pain, especially if we hit back with counter-tariffs, will be felt in all aspects of lives. People will see it if they try to travel with a depressed dollar, especially with March break coming up. People will see it at the gas pump; people will see it in the grocery stores,” he shared.
“It’s really going to hurt. We have to get through it, and our government’s doing all it can, but it’s just madness that we find ourselves in this situation because this is all self-inflicted. This isn’t being done to us because of a weather event or a war in a foreign country. This is the North American household that’s sort of doing all this damage to itself… on that level, it’s madness.”