Canada responds to tariffs Sunday
American goods from aluminum to whiskey likely to be targeted.
From mustard to motorboats, Canada’s about to fire back against Donald Trump on its national holiday.
Prime Minister Justin Trudeau will mark Canada’s 151st birthday Sunday by imposing tariffs on about $19.4 billion Canadian ($14.6 billion) worth of U.S. imports in response to American levies on Canadian steel and aluminum that went into effect a month ago.
While the tariffs alone are unlikely to derail Canada’s expansion or boost overall inflation, they add to the growing tension between two of the world’s biggest trading partners. Talks over a new North American Free Trade Agreement have stalled, and Trump has threatened to impose additional duties on autos.
Canada, meanwhile, is preparing fresh duties as early as next week on non-U.S. steel imports to prevent dumping.
“It’s regrettable that we have to engage in this kind of tit-for-tat trade war, but it’s been forced on us by Mr. Trump,” Toronto-based trade lawyer Lawrence Herman said. “Canada has no choice but to respond in accordance with the rules of international trade.”
Trudeau will lead the Canada Day festivities by visiting a pair of trade battlegrounds Sunday: a southern Ontario town near the U.S. border once famous for Heinz ketchup, and a steel mill in Saskatchewan, meeting with workers in each.
The tariffs on U.S. goods cut a broad swath from steel and aluminum to whiskies, mustard, ketchup, toilet paper, mattresses, lawn mowers, motorboats, assorted appliances — even maple syrup. The duties will be 25 percent on steel and 10 percent on everything else.
The tariffs are overwhelmingly popular in Canada, according to most polls, but come with unease as prices may rise on hundreds of goods.
Sticker shock
Scott Brundle, dealer principal for sales at Town & Country Marine in Lakefield, Ontario, said the tariffs on boats will lead to sticker shock for buyers.
“It will dramatically affect our business,” Brundle said, adding that inventory levels are lower than he’d prefer as he cuts orders and works with suppliers to find ways to make sales viable. U.S. manufacturers that sell in Canada include Larson Boats of Minnesota and Brunswick Corp. of Lake Forest, Ill.
“We’re gonna kick the can down the road,” Brundle said. “We’ll get some inventory in here to fill the showroom up, and pay the tariff to have them on display, and then we’ll take orders. From there, what we charge on the orders, I don’t know.”
The tariffs could add $10,000 Canadian to the cost of a wakeboard boat from Malibu Boats Inc. of Tennessee. Brundle has three of them on order for July.
“So do the math. It’s going to be $30,000 to $40,000 (Canadian) cash in tariffs on those three boats,” he said.
Still, the economic impact of the latest tariffs fight is minimal compared with a pair of other looming Canada-U.S. trade issues: potential auto tariffs, and threats to end NAFTA.
Trump and Trudeau have clashed recently, with the president warning Canada will pay for it.
“If they said tomorrow those auto tariffs are in place, it becomes a meaningful hit,” said Mark Chandler, head of fixed-income research at RBC Capital Markets. “People are more worried about what happens to autos.”
Linda Hasenfratz, chief executive officer of autoparts maker Linamar Corp., went further, saying it would be the “next and final