From mustard to motorboat, Canada will fire on its national holiday against Donald Trump.
Prime Minister Justin Trudeau will celebrate Canada's 151st birthday on Sunday by raising tariffs on US imports of some $ 14.6 billion in Canadian steel and aluminum, which came into force a month ago, in response to US taxes.
While tariffs alone will not stem the expansion of Canada or fuel headline inflation, they are adding to the growing tension between two of the world's largest trading partners. Talks about a new North American Free Trade Agreement have stalled, and Trump has threatened to impose additional duties on the cars. Meanwhile, Canada is preparing new tariffs on non-US steel imports next week to prevent dumping.
"It is unfortunate that we need to interfere in such a trade war, but he was forced upon us by Mr. Trump," Toronto-based attorney Lawrence Herman said in a telephone interview. "Canada has no choice but to respond in accordance with the rules of international trade."
Trudeau will lead the Canada Day celebrations by visiting two commercial battlefields: a southern Ontario town near the US border, once famous for Heinz Ketchup and a steel plant in Saskatchewan, each meeting with workers
The Tariffs for US goods proposed by Trudeau ranged from steel and aluminum to whiskeys, mustard, toilet paper, washing machines, motor boats and maple syrup. The tariffs amount to 25 percent for steel and 1
Customs rates are mostly popular in Canada in most surveys but come with discomfort as prices can rise to hundreds of goods
Scott Brundle, dealer for sale at Town & Country Marine in Lakefield, Ontario, said that tariffs on boats will cause a shock for buyers.
"It will dramatically impact our business," said Brundle Stock levels are lower than he would like, as he breaks orders and works with suppliers to find ways to make sales profitable. US manufacturers selling in Canada include Larson Boats of Minnesota and Brunswick Corp. of Lake Forest, Illinois.
"We'll kick the can down the street," Brundle said. "We're going to get some inventory here to fill the showroom and pay the customs to display it, and then we'll take orders, from there what we charge for the orders, I do not know."
Tariffs could add C $ 10,000 to the cost of a wakeboard boat from Malibu Boats Inc. of Tennessee. Brundle has three of them on order for July.
"So do the math. It will be C $ 30,000 to C $ 40,000 cash duties on these three boats," he said.
Nevertheless, the economic impact of The fight against recent tariffs is minimal compared to other, looming trade issues between Canada and the US: possible car fares and threats against Nafta. Trump and Trudeau have recently collided, and the president warns that Canada will pay for it.
"If they said tomorrow that these car fares are in place, that will be a significant achievement," said Mark Chandler, head of pension research at RBC Capital Markets. "People are more worried about what happens to cars."
Linda Hasenfratz, CEO of car manufacturer Linamar Corp., went even further and said that this was the "next and final step to an economic disaster"
The tariffs are never good, they add costs, ultimately hit the consumer and hammer the economy, "she said, adding that US metal tariffs are increasing the cost of the auto industry, which will eventually lead to layoffs, and Linamar's stock fell to a 14-month low on Thursday in Toronto.
There are mixed views on how quickly Canada should continue with its retaliation: Canada's largest steel producer, a unit of ArcelorMittal, has warned that 1,000 direct jobs are threatened by US taxes, Ken Neumann, the national director of the United Steelworkers for Canada said this week's MPs said he was "very worried that Canadian industry was going through the month delay has already been damaged. "
But others fear the government is moving too fast.
Domestic steel companies across the country expect Canada's retaliatory tariffs to increase as competition and supply of steel in the market continue to decline.
"We saw US prices skyrocketing, which had an impact" We're raising Canadian prices, "said Tim McMenamin, vice president of Ferrostaal Steel Canada Inc., a concrete importer
"If I had a message for the Federal Government today, it would be a glimpse before jumping," Manitoba's Treasury Secretary Cameron Friesen said during a meeting of finance ministers in Ottawa is a view repeated by a business owner during legislature hearings.
"I think Trump is a bear, we should not poke him too hard, the bear will start roaring," said Bob Verwey, president of Owasco Inc. (19659002) The direct economic impact of Canada's US metal tariffs and retaliatory measures, either in terms of economic activity or inflation, will prevail low. Jean-Francois Perrault, Scotiabank's chief economist, expects "maximum" growth of 0.1 percentage points and less than one tenth of a percent of inflation.
"Our impression is that the impact on the economy will be low, but could be significant for the steel industry over time," said Perrault, adding that the outcome of the Nafta negotiations remains Canada's central trade issue ,
Steel costs could continue to rise as Canada makes plans to impose tariffs and quotas on non-US imports from China and other countries. The measures can already be announced next week, informed the familiar with the plans people. Finance Minister Bill Morneau said his government is "absolutely" behind metal-affected companies.
Canada is also facing risks from the US-China trade dispute. Canada sends three-quarters of its exports to the US, so any slowdown in US growth will affect Canada. At the same time, it is a major oil producer and any Chinese downturn could dampen demand.
"If you get a major trade war, the likelihood of a recession is real," Perrault said.
Bloomberg's Natalie Wong and Kristine Owram contributed.