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.