TORONTO – Since Donald Trump, soon to be sworn in as President of the USA, is unaccustomed to apologizing, whether he needs to or not, I will do so for myself and everyone else. For those who read our opinion piece on trade ramifications implied in Trumpian musings (read here), the Corriere Canadese, and I, were wrong.
The President is not threatening a 10% tariff on Canadian exports to the USA; rather, the tariff increase will be 25% as of day one in his presidency, starting January 20-21, 2025. He will do so by Executive Order immediately upon taking office. We should expect little push back from Congress, the Senate and American Businesses and consumer interests – they all stand to gain.
Moreover, as the graphic on this page illustrates, he is well within the exercise of his constitutional rights to do so. Let me dry my tears: it is not fair! Let me focus for the moment on the tangible issues I raised yesterday – the money.
Statistics Canada estimates the value of Canadian exports to the USA (as in 2023) at CDN $440 billion, and total two-way trade at approximately $790 billion annually. This latter total represents circa 30% of Canada’s GDP. One can only speculate what the impact will be on the Canadian economy. Commentators on mainstream media like the word “catastrophic”.
Canadian exporters will have to come up with $110 billion in duties to send their products across the border – that is in the range of 5% of Canada’s GDP. Also, assuming every million dollars supports fifteen jobs at about $70,000in wages and benefits, the $110 billion loss may translate into a commensurate loss of 1,1650,000 jobs for Canada.
By the way, Trump would also be appearing to remind us that Canada is still well short of the 2% of GDP we committed to spend annually on Defense matters. We have been derelict with a shortfall of $19.7 billion annually. In addition, President Trump seems to be well briefed on our “troubled” domestic policies, including – especially – the apparent need to “deport” over two million illegally entered residents. Where will they end up?
Not in the USA, says he. Until Canada resolves these problems we can expect no relief.
