A number of customers have expressed concerns over the potential trade tariffs announced by Trump, so I’d like to address this in an article. The proposed 25% tariff on Canadian imports by President-elect Donald Trump marks a significant escalation in trade tensions between the U.S. and Canada. Framed as a measure to address drug trafficking and migration concerns, the tariff threatens to disrupt one of the world’s closest economic partnerships.
We understand that this may be a concern to our American customers, in case they should be expecting additional costs to bring their machines and other products from our company in Canada to the US.
Likelihood of a tariff being put into place
With such a significant amount of business being done between US and Canada, this tariff would potentially create a huge impact on both economies, with potential price increases for imported good in the US, and slower sales for Canadian companies. Additionally, this creates a burden on the customs systems put into place, which could mean longer times for products to clear across the border.
It should be noted that, at least according to Trump, these measures are put into place to address drug trafficking and illegal immigration by creating a potential economic punishment for governments that don’t crack down on these things. If both governments are able to find a way to solve some of these issues, it may mitigate the need for a trade war. Additionally imposing tariffs between US and Canada may potentially violate the USMCA trade agreements, which allow for easier trade between United States, Mexico, and Canada, which can cause other economic implications and political repercussions. The USMCA took over a year of negotiations and nearly 3 years to fully implement, and unravelling that could have serious consequences.
All this means that the situation is very nuanced and complicated. I don’t expect there to be dramatic changes right away, but we are keeping an eye on the situation as it progresses. There may be a chance that there won’t be any tariffs levied, the tariff amount is smaller than originally proposed, or it may be only to certain products and materials that pertain to us.
What happens if a tariff gets put into place
We intend to honour our pricing and responsibilities to cover duties and taxes for products shipping to the United States as we have continued to do so in the past few years.
However, an import tariff will impact our costs and the bottom line of the business, and we may need to address that when we know what will move forward with tariffs if there ever is one. We will reconsider pricing for our products once we learn of changes in the tariffs if or when it occurs.
From my personal experience and opinion, while there may be some tariffs imposed, the direct impact to us and our customers in general may be more nuanced, such as interventions from the Canadian government to support Canadian companies. There have been many changes in the political and economic landscape that our company has faced, and I believe that regardless of what happens, we’ll figure out a way through like we always have.