Tariff war traps businesses ‘between a rock and a hard place’

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It is expected that you will pay more for everything starting from new cars to the weekly grocery store, where the tariff war between Canada and the United States presses some companies on both sides.

So far, US President Donald Trump has put a tariff on steel and aluminum imports and threatened more on April 2. In response, Canada slapped duties on American goods about 60 billion dollars and threatened them with $ 100 billion.

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Florence Jean -Jacobs, the lead economist at the Degardens Group, said, but there will also be negative repercussions of anti -definitions in Canada and the weakest Canadian dollar of companies that import materials from the United States.

She wrote in her report: “Some industries are arrested between a rock and a difficult place, which risks a decrease in demand for their products and increased their offer costs if the alternatives are not found easily.”

The most difficult sectors are the manufacture of food, machinery, plastic, chemistry, cars, space, wholesale trade and crop production.

Take, for example, the food manufacturer in Canada is exported to the United States. They will have to push more to import grains, fruits and other raw materials from the United States to make their products due to Canadian definitions, only to see sales is south of the border because American definitions make them more expensive.

Even the sectors that are elastic in direct definitions of Trump such as construction, retail and food services will face higher costs due to Canada's reprisal duties and the poor Canadian dollar.

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The construction industry in Canada will pay more for the products it buys from the United States, which ranges from heating equipment and air conditioning to furniture and cabinets to electricity and plumbing fixtures.

The Descreen report said that wholesalers and car dealers will pay more for cars imported from the United States, and retail dealers will wear clothes, food, drinks, pharmacist and medical suppliers.

“Therefore, we can expect consumers to pay higher prices for cars, parts imported from the United States, and food purchases that are difficult to replace with Canadian or external products at an equivalent cost,” said Jean -Jacobs.

Low LONIE can raise the price of gas, especially in eastern Canada, where refineries are not prepared to deal with heavy oil in Western Canada and rely on imports from the United States.

Economists said that pressure on both sides may lead to liquidity challenges for some companies.

“They will have to choose between reducing their profits or increasing their selling prices, which will weaken their strength to keep customers and attract the already burned clients due to the high inflation that followed the epidemic.”

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The challenge will be particularly difficult for low -margin companies.

“In particular, auto agents and grocery stores have some of the lowest margins between non -financial industries in Canada. Since the anti -Canada models in particular have targeted food and cars, these companies may face great challenges.”

Jean -Jacobs said that government support in reducing internal commercial barriers in Canada, increasing productivity and exploring alternative markets will help all, “but companies will need to be proactive and invest to build their flexibility against four years of uncertainty and volatility.”

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How much is Trump, the 25 -year -old steel and aluminum imports to Canada? These sectors are highly dependent on the American market, but in the large image it constitutes only 6 percent of the total exports in Canada.

However, the regional influence is important, especially in Ontario and Kepeck, Maria Soloviva of TD Economics said. Ontario produces most steel exports to the United States and the aluminum cabiak.

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Quebec is not only the largest aluminum producer in Canada, but it is the largest on the continent and ranks fourth in the world behind China, India and Russia.

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It was written after that day Pamella heavenWith additional reports from post -financial staff, Canadian press and Bloomberg.

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