If U.S. President Donald Trump follows through with a threat to impose tariffs on foreign countries, Canada may not be hit as hard as some fear, one expert says.
“I’m not saying we’re going to be immune,” Ian Lee, an associate professor at Carleton University’s Sprott School of Business, told CP24 on Tuesday.
“I don’t think Canada is going get hit anywhere near as hard (as some think).”
Trump first threatened to impose tariffs on Canada and Mexico back in November, indicating that he would implement 25 per cent tariffs on the two countries on the first day he took office. At that time, he said the tariffs would continue until Canada and Mexico did their part to stem the flow of drugs and migrants coming across the border.
Following Trump’s inauguration on Monday, the president suggested that his administration could introduce 25 per cent tariffs on all Canadian imports starting Feb. 1.
“We’re thinking in terms of 25 per cent on Mexico and Canada because they’re allowing vast numbers of people, Canada is a very bad abuser also, vast numbers of people to come in and fentanyl to come in,” Trump said on Monday night.
But Lee said he is skeptical that across the board tariffs are really apart of Trump’s plan.
Lee said Stephen Miran, the new chair of the president’s Council of Economic Advisers, recently released a report outlining “what Trump is up to.”
“They are going to start low and it is going to be selective by countries depending on the extent of the change that they want to see in those country’s policy frameworks,” he said.
“Many are saying in Canada that there is no rhyme or reason to these tariffs. He’s just doing it on a whim. That’s simply not true.”
He called Miran’s paper a “very well-developed theory.”
“You may not like the theory. You may not agree with the theory. But there is a theory,” he said.
“They are going to put countries into three categories. The worst offenders, the ones not offending that much and the ones who are okay… I don’t think Canada is going to end up in the worst basket and I’m not so sure it will end up in the middle basket. I think we may end up in the mild basket.”
He said he expects any tariffs imposed on Canada to be more “modest.”
“Not the 25 per cent that everybody’s got their hair on fire over,” Lee added.
“They are not going to be across the economy. My evidence for that is… yesterday, I watched the whole speech of President Trump. He said energy and agriculture, ‘we are declaring an emergency.’ He said we need more product. Well he’s not going to put tariffs on agricultural exports from Canada when he’s just said there is a shortage of food, which is driving up food prices. So we know he is going to exempt agriculture and energy.”
Lee said of all of the provinces, Ontario may feel the brunt of the impact when it comes to tariffs.
“Premier Ford should be much more careful,” he said. “If it is going to fall anywhere, it’s going to fall on automobiles and that’s Ontario.”
With files from The Canadian Press
