What do new tariffs on U.S. products mean for your wallet?

New tariffs on a wide variety of goods imported from the United States won’t have an immediate impact on consumers, experts say, but the unprecedented trade war between Canada and the U.S. could have a long-term negative impact.

On Thursday, the Canadian government announced a 25 per cent tariff on imports of iron and steel products, along with 10 per cent tariff on imports of a wide variety of consumer goods — a list that includes whisky, chocolate, toilet paper and playing cards.

The tariffs, scheduled to come into effect on July 1, are in response to a U.S. decision to end a tariff exemption for imports of Canadian steel and aluminum.

WILL THIS MEAN HIGHER GROCERY PRICES AT STORE?

“It’s possible but it’s probably unlikely,” said Moshe Lander, an economics professor at Concordia University. “It’s unlikely because I don’t think they’re going to last long enough to be passed along to consumers.”

Consumers won’t see an immediate jump in prices on July 1, he said. Few of the goods on the list are only available from the U.S., meaning competition could help keep prices steady at least in the short term.

U.S. suppliers might also be motivated to keep prices stable to avoid pushing Canadian importers to look elsewhere, said Karl Littler, vice-president for Public Affairs at the Retail Council of Canada.

The tariff applies to the price paid to import a product, not the retail price which includes such additional factors as the rent and wages retailers pay, meaning prices are unlikely to rise by 10 per cent even in the long term, he said.

WHAT DOES THIS MEAN FOR RETAILERS?

“Firms don’t switch their suppliers on a dime,” said Dan Kelly, the CEO of the Canadian Federation of Independent Business. “Even if they do then start to shop around, everybody else is shopping around at the same time and then Canadian or even other international suppliers may not be able to meet the demand to replace the area that is affected.”

While small businesses may be able to eat any price increases in the short term, if the tariffs last, they ’ll have to pass price increases on to consumers.

Ultimately, the real consequences could be in the long term.

“The big consequence is that businesses can’t plan. If I’m a part of a supply chain that is dispersed across three countries, the three NAFTA countries, and I don’t know what’s going to happen in the next six month, I’m not going to invest. I’m just going to wait it out and see what happens and that means lower growth across all three countries,” said Krzysztof J. Pelc, a political science professor at McGill University.

WHAT DOES THIS MEAN FOR THE NAFTA NEGOTIATIONS?

Land said he sees the U.S. tariffs as an attempt to gain leverage in the ongoing NAFTA negotiations but he doesn’t think it will work.

“I don’t think the Canadian government is all of a sudden going to say, ‘Oh now I guess we can concede on car parts because there’s a tariff in place,’” he said.

Pelc also believes this will set the negotiations back.

“Negotiations depend on goodwill and this is a way to kill goodwill,” he said.

He sees it as part of a pattern. “Trump makes a big threat in order to gain, frankly, a small negotiating advantage,” he said. “There might be some bone thrown at the U.S. and Trump can tweet about it and that’s really the decisive factor: Can Trump extract something from this that he can tweet and say ‘OK, we won.’ ”