“Catastrophic”. This was the first word that came to mind to Ian Lee, professor at the Sprott School of Business at Carleton University in Ottawa, when he learned of Donald Trump’s intention, revealed on Monday, November 25, to impose a tax of 25 % to products exported from Canada. . Some figures allow us to better understand their reaction and the scope of the threat. Last year, more than three-quarters (77%) of Canadian exports, by value (595 billion Canadian dollars, or 403 billion euros) went to the United States and more than 2.2 million jobs Canadians depend on them.
At the top of these exports are energy products (166 billion Canadian dollars in 2023, or 112 billion euros), then motor vehicles and their spare parts (85 billion Canadian dollars, or 57.6 billion million euros). “ If Trump implements the tax, southern Ontario’s auto industries will lose their biggest export market within a day. There will also be a significant impact on port activity and rail trade. “It’s almost as if Trump announced the closure of the border.” analyzes Mr. Lee.
In his report “ Partners for Prosperity: Studying the Importance of Trade between Canada and the United States »Trevor Tombe, a professor in the economics department at the University of Calgary, anticipated that a 10% tariff on Canadian exports would reduce production exported to the United States by the energy and manufacturing sectors by 22%.
Total risk strategy
In 2026, the three signatory countries of the Canada-United States-Mexico Agreement will have to decide whether to expand the text. But in fact, if Donald Trump’s threat is carried out, “The agreement no longer exists because the United States will no longer respect its terms”observes Nelson Wiseman, professor emeritus of political science at the University of Toronto.
During Trump’s first term, the previous trade war between the two countries resulted in tariffs of 25% on steel imports and 10% on aluminum imports, to which Ottawa responded. But the announced tax is very different, says Nelson Wiseman: “It’s just a threat!” But the prices it announces affect all sectors. A specific answer is impossible. » Donald Trump conditions the lifting of customs tariffs on better control of the borders of Canada and Mexico.
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