TLDR Tariffs Averted! What Happens Now?
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Feb 5, 2025 Trevor Tombe, a Professor of Economics at the University of Calgary specializing in international trade, joins the discussion on the intricate dynamics of trade relations between Canada and the U.S. He shares insights on the ramifications of tariffs and the challenges posed by interprovincial trade regulations. The conversation highlights the importance of diversifying trade partnerships and the economic impacts of a fluctuating Canadian dollar. They also embark on a personal challenge to buy only Canadian-made products, illustrating local support amidst trade tensions.
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How Tariffs Work
- Tariffs on American goods primarily affect American consumers, not Canadians directly.
- However, tariffs can indirectly harm Canadians by reducing American demand for Canadian products.
Tariff Duration and Impact
- The duration of tariffs significantly impacts their economic consequences.
- Short-term tariffs might be absorbed by inventories, while long-term tariffs can lead to permanent shifts in supply chains.
Reducing U.S. Dependence
- Diversify trade flows and invest in infrastructure to reduce reliance on the U.S.
- Reform taxes and improve the internal economic union through interprovincial trade.