Let’s stay focused on making the right deal for two countries that, frankly, do not have a trade problem
There has been a lot of emotion over the past week or so in the latest battle in the trade war between Canada and the United States. Promising Canada-U.S. trade talks ended without a deal on Aug. 21, triggering the imposition of section 338 tariffs on a range of Canadian products and impending retaliatory tariffs on a range of U.S. products.
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The numbers sound big — 50 per cent tariffs on billions of dollars of trade — but remember that in the context of the overall national trade relationship, it is not a material percentage.
That is not to say it isn’t impactful. Many Canadian businesses are being immediately impacted and that means jobs are at risk. I certainly empathize with those businesses and the struggles they are facing; let’s not diminish that in any way.
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But the tariffs are not material in a broader, national sense. We export US$450 billion of goods and services to the U.S. from Canada each year and the 338 tariffs are impacting US$20 billion, or about five per cent of the total trade. A similar dynamic exists for the U.S. and the retaliatory tariffs.
Of course, the latest tariffs add to the 232 metal and metal derivative product tariffs that were impacting Canadian businesses at about the same level, perhaps slightly more.
This means roughly 10 per cent to 15 per cent of Canadian exports are impacted by U.S. tariffs, including the latest round. In other words, more than 80 per cent of Canadian exports to the U.S. are not impacted by tariffs.
So, let’s try to take a deep breath and keep a practical lens. Trying to unsettle an opponent with pointed taunts is a common negotiating tactic. The key is not to rise to the bait.
