Canada needs to see its Parliament recalled from prorogation to focus on immediate and longer-term fixes to respond to President Donald Trump’s 25% tariff threat, the President of the Canadian Chamber of Commerce says.
That work, Candace Laing told a Manitoba Chamber of Commerce breakfast February 5, requires an all-party collaboration to show the US Canada is ready to respond.
While President Trump has announced a 30-day pause on his tariff deadline, Parliament must move now and “use 30 days like you’ve never done before.”
Laing told the business crowd the tariff threat is part of a larger strategy to use trade to fill US government coffers.
Trump, she said, is pulling from a McKinley-era tactic – and echoing the protectionist cant about saving American industries and jobs – to generate revenue and fill government coffers.
Tariffs, themselves, make no economic sense as they would also bite American buyers relying on Canadian products. Retaliatory tariffs on American exports to Canada would compound the pain.
Laing referred to Canada’s over-reliance on the American market as “the biggest pain point”, but noted it may also be our country’s saviour. Some industries are so integrated that any attempt to tariff a product or commodity will immediately hurt American corporations, producers and shoppers.
A tightly integrated supply chain can’t unwind overnight, she said.
And there is huge political risk if prices rise for Americans. A lot of states, including those that are Republican, are heavily dependent upon trade with our provinces.
“We are the biggest customer for 34 states.”
(McKinley’s 1890 Tariff Act, in fact, triggered a rise in prices in the US, leading to the downfall of the Republican party. Democrats repealed the Act and reduced the tariffs by 1894.)
Laing said this is a wake-up call for Canada, which has relied on the convenience of proximity to one of the world’s largest markets.
“I don’t think we can deny that our economic situation has been years in the making by our own hand and it has left us vulnerable.”
Canada must diversify its export markets, and raise productivity and competitiveness, she said.
Parliament must be reconvened, Laing said, so all parties focus on solutions, including: emergency relief should the 25% tariff materialize; a sharp response to the US; and, remove roadblocks that have prevented free movement of goods and services across our provinces.
Canada also must:
- invest in its national trade transportation infrastructure to enable more efficient flow of trade internally and globally
- reduce red tape and reform the tax regime to allow business to be more competitive and to attract investment.
