The Big Story
Fact Check: Who wins, who loses in the potential U.S.-Canada trade war
Jan 15, 2025
Jim Stanford, an economist from the Centre for Future Work in Vancouver, offers a clear-eyed analysis of the potential U.S.-Canada trade showdown. He debunks myths around the supposed trade imbalance, illustrating that the countries engage in about a trillion dollars in trade annually. Stanford highlights the risks that proposed 25% tariffs pose not just to Canadian goods, but also to U.S. businesses that depend on them. He emphasizes the interconnectedness of both economies, especially in sectors like energy and automotive.
18:18
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Quick takeaways
- The proposed 25% tariffs on Canadian goods could backfire by increasing costs for American companies and harming both economies.
- Misleading claims about a significant trade deficit overlook the reciprocal benefits of U.S.-Canada trade, which forms a vital economic partnership.
Deep dives
The Truth About Tariffs
The proposed 25% tariffs on Canadian goods by the U.S. President-elect could harm both economies rather than help the American trade balance, as the exports to Canada significantly benefit U.S. businesses. Current trade dynamics show that Canada supplies essential inputs, raw materials, and spare parts, comprising 76% of its exports to the U.S. Imposing large tariffs would increase costs for American companies that rely on these goods in their production processes, ultimately driving up prices for consumers. Therefore, the threat of tariffs might backfire, making U.S. firms less competitive while simultaneously hurting Canada's economy.
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