Can Canada avoid Trump tariffs? Likely some, but not all: ex-envoy
Global News
Canada's former ambassador to the United States says he’s confident Ottawa can avoid the worst of the tariff threats proposed by U.S. president-elect Donald Trump.
Canada’s former ambassador to the United States says he’s confident Ottawa can avoid the worst of the tariff threats proposed by U.S. president-elect Donald Trump, but that Canada won’t be completely unscathed.
Frank McKenna, who is now deputy chair at TD Securities, said he believes the incoming president is looking to use money from tariffs to lower American taxes but that Trump’s 25 per cent tariff is likely “a throwaway number” meant to act as a bargaining tactic ahead of his inauguration.
“If he were to actually put 25 per cent tariffs against all Canadian goods and all Mexican goods, that would be enough to precipitate inflation in the United States of America and probably cause a spike in the dollar, which would undermine what he’s trying to do,” McKenna told Global News.
“There is a chance that we could end up with some number like 10 per cent tariffs in the short term until we can get it sorted out but no, I don’t think that we’ll end up with 25 per cent tariffs on Jan. 20.”
If Trump follows through on his threat, federal officials as well as premiers and trade groups have said it would wreak havoc on Canada and the U.S. with more than $3.5 billion in goods and services crossing the border daily.
“It’s impossible to raise tariffs by any meaningful degree without harming both U.S. and Canadian companies,” according to Greg Husisian, a partner at Foley & Lardner who chairs the law firm’s international trade and national security practice in Washington.
In order to avoid the worst case scenario, McKenna says Canada needs to carry out public diplomacy and private negotiations, which are already underway.
And despite Trump’s jabs at Prime Minister Justin Trudeau calling him the “governor” of the “great state of Canada,” McKenna believes there is hope of reaching an agreement.
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