TLDR
Tariffs Averted! What Happens Now?
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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Quick takeaways
- The potential tariffs from the U.S. could lead to a $160 billion decline in Canadian exports, resembling a medium-sized recession.
- Interprovincial trade regulations in Canada create significant barriers, inflating costs by up to 15% and hindering economic growth.
Deep dives
Impact of Tariffs on Canada
The recent announcement of tariffs by the United States on goods from Canada and Mexico is expected to create significant economic uncertainty. Initially set at 25% for most goods and 10% for energy, this move raised alarms about a potential trade war, especially after Canada’s retaliation. Economic experts warn that the impact could be severe, with estimates suggesting a potential $160 billion decline in demand for Canadian exports, resembling the scale of a medium-sized recession. The unpredictability regarding how long these tariffs might last adds further to the anxiety for Canadian businesses and investors, making planning increasingly difficult.
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