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Canada is preparing for an all-out trade war with its closest trading partner and one of the top trading partners, and the list of US goods that could be affected is long.
Canadian officials are preparing a three-step plan for retaliatory tariffs and other trade restrictions against the United States, which will be put in place if President-elect Donald J. Trump makes good on his threat to impose 25 percent tariffs. of all Canadians. goods imported into the United States.
Canadian officials will wait until Mr. Trump will make the move – which he said will be on the first day of his job, Monday – and then start with setting wages. About 37 billion Canadian dollars ($25.6 billion) worth of goods could be affected, according to two senior government officials familiar with the plan.
They spoke on the condition of anonymity to discuss the details of the plan to remain private for now.
Purpose: Maximum political pain
Canadian officials said their choice of goods was targeted and aimed at political influence. They want to focus specifically on goods manufactured in Republican or swing states, where the pain of wages, such as pressure on jobs and the bottom line, will affect Trump allies. to local businesses.
The Canadian government hopes that its allies, including governors or members of Congress, will then pick up the phone and call Mr. Trump, intervening in support of easing.
Mélanie Joly, Canada’s foreign minister, who spent Thursday and Friday in Washington, met with several Republicans to discuss their country’s business, including Senator Lindsey Graham of South Carolina, Senator Jim Risch from Idaho, and the leader of the majority of the Senate,leg-V, Idaho, Idaho. South Dakota.
Ms. Joly said she hoped her meeting with senior Republicans would convince them to intervene to prevent or limit a trade war and its negative impact on consumers and jobs on both sides of the border.
“My job here is to be able to talk about the situation, and that is before the threat against wages from us,” said Mrs. Joly in an interview with The Times on Thursday. “Because the senators might say, ‘Well, why are we doing this?’ Why do we set tariffs? It affects my area.’ “
But, he added, Canada is prepared to defend its interests by force if necessary. “Never underestimate Canadians,” he said. “We are fighting hard, and we are very brave. We are ready to operate and may affect American jobs. “
Prepare the first day of Mr. Trump in office and what it could mean for Canada, Prime Minister Justin Trudeau and his cabinet will meet Monday and Tuesday in what some are calling “the American war room,” to he can do it. Respond quickly if US prices are announced.
The detailed list of items is being kept close, but includes dozens of items from various categories, such as food and beverages, and a variety of everyday products, including dishwashers. and porcelain items such as bathtubs and toilets.
Depending on which Canadian goods Mr. Trump chooses to impose tariffs on, and the level of those tariffs, Canada’s second move would be to extend its own tariffs on more American products, affecting 150 imports. billion Canadian dollars from the United States.
As part of its strategy, the Canadian government is also looking at other measures that could limit Canadian exports to the United States, such as export quotas or duties to be taken by the American side. This type of measure is reserved for the most sensitive Canadian exports that the United States relies on, such as the electricity from Quebec that was used to provide energy throughout New England.
Tariffs act like taxes on goods and are usually passed on to consumers. It makes foreign goods more expensive, and this often means that consumers stop buying, hurting the foreign companies that export them.
Trade restrictions such as export quotas aim to limit the availability of an export product, and are most effective when the importing country does not have accessible or sufficient resources for that product.
Returning from the coast
No matter how tariffs or restrictions on Canadian exports are imposed, the goal will be the same: to force the Trump administration to back away from the president-elect’s vow to wage a devastating trade war with neighbors of the United States.
The trade relationship between the two countries is huge, with goods worth nearly 1 trillion dollars a year. Canada is tied with Mexico as the largest trading partner of the United States based on oil prices.
Some cross-border industries are so integrated that wages can be a major headache for many companies. A single car, for example, crosses the border of the United States and Canada up to eight times before it is fully assembled. The tariffs will immediately disrupt assembly lines across the United States and in Ontario, the heart of Canada’s auto industry.
And Canada exports essential goods to the United States. 80 percent of Canada’s oil and 60 percent of its natural gas are exported to the United States. More than half of the oil imported into the United States comes from Canada.
A third and final level of escalation as the trade war between the US and Canada escalates and the Canadian government wants to avoid restricting exports of hundreds of billions of dollars worth of sensitive goods, including oil and gas, potash, uranium and crude oil. minerals. All are vital exports to the United States
Alberta, Canada’s largest oil producer, has said it does not support measures that could affect their industry. The rift between the province’s leaders and the rest of the country could worsen if Canada decides that oil should be used for the use of the United States.
Canada’s plan for a potentially protracted U.S. trade war includes supporting domestic industries, a senior official said.
The government is planning the possibility of financial relief for Canadian companies that are affected by US prices, which is likely to be on a case-by-case basis, officials said.
While mass bailouts or industry-wide bailouts may not be on the table, the official said it was unacceptable to let the tariff war with the U.S. wipe out jobs and thousands of companies without the government stepping in to mitigate the outbreak.
