Canada’s counter-tariffs against U.S. will hurt Manitoba businesses, consumers

Canada’s trade deal with the United States not coming to fruition means 50 per cent tariffs on about $20 billion worth of Canadian goods are now in place.

In response, the Canadian government has said counter-tariffs against the United States will go into effect on Tuesday, Sept. 8.

For Manitoba Chambers of Commerce President Chuck Davidson, he understands why the federal government decided to retaliate, but says those tariffs will hurt Manitoba businesses and consumers.

“Everyone loses — when you’re in a tariff war, there are no winners,” said Davidson. “You’re going to lose on both sides of the border, costs are going to go up. It makes it more challenging to do business in terms of that trade relationship.”

When it comes to easing the Manitoba economy’s reliance on the United States, Davidson says progress has been made. Prior to the trade war, around 73 per cent of all trade from Manitoba was going to the U.S.. That’s dropped to 66 per cent.

“Investments in the Port of Vancouver, the Port of Montreal, the Port of Churchill — there are opportunities that aren’t going to be felt immediately, but longer-term they will have an impact,” said Davidson.

Some of the Canadian industries expected to get hit the hardest through this latest escalation include dairy, alcohol, and lumber.

Supply-Build Canada is the national association for the building-supply industry. President Liz Kovach says it’s unfortunate counter-tariffs will impact Canadian businesses and consumers, but explains that home builds in the United States will hurt significantly during the trade dispute.

“Not being able to sell into the U.S. definitely hurts because that’s a market we’ve relied on for a very long time,” said Kovach.

“We know that the United States is underbuilt four to five million homes. There’s not enough lumber in the U.S. to support that and that’s why they need to bring it in from Canada.”

Many Manitoba-based companies are just as worried about the counter-tariffs as they are about the additional levies being imposed by the United States.

Those companies include Evolution Wheel, which produces airless tires for the agriculture and construction industries. The concern there is that the business is constantly moving products and materials back and forth across the border, meaning the United States’ tariffs plus the retaliation from Canada would be a massive hit.

“We bring in a semi load of raw materials one way or the other pretty much every week, sometimes twice, and we have something crossing the U-S border every day,” said Evolution Wheel owner Derek Hird.

“It really just seems counter-productive to what we’re trying to do. If we’re trying to have a negotiation and trying to have a deal, there’s a lot rhetoric going on and comments that are inflammatory and antagonistic from Canada into the United States.”