As new U.S. tariffs loom, one business expert warns that the trade war could drive up prices on many kinds of products, including those not targeted by specific levies.
Billed by U.S. President Donald Trump as “LIBERATION DAY IN AMERICA,” Wednesday is set to bring a new slate of American import tariffs on goods from trading partners around the world, designed to reciprocate tariffs on U.S. goods in those countries.
The Canadian government says it has been preparing for additional tariffs coming today, noting on the Department of Finance’s website that “all options remain on the table … should the U.S. continue to apply unjustified tariffs on Canada.”
Andreas Schotter, a professor of international business at Western University in London, Ont., says the impacts of new Trump tariffs could be vast.
“We will see price increases across the board anywhere between 10 per cent and 50 per cent, depending on how much of the value-add is happening in the United States,” Schotter said in an interview with CTV Your Morning Wednesday.
“What is much more worrisome is the continuing slide in the Canadian dollar, affected by these measures and the current trade war, which will put additional pressure on products.”
Goods like new automobiles, consumer electronics and processed foods are under threat, he notes, but so are things like gas and used cars, not because of the tariffs and counter-tariffs themselves, but the inflationary pressures and impacts on supply and demand they create.
Strangely enough, as tariff fears push consumers to save their money, falling demand may bring prices down in the very short term, Schotter notes.
“[People] walk through the aisles very differently. They’re not just grabbing and throwing in their cart; they’re putting products back, they look very carefully where the product comes from, how much it costs, and they go more to house brands,” he said.
“This is not the Thanksgiving rush, this is just people being very careful what they’re buying.”
Schotter notes that unlike at the beginning of the COVID-19 pandemic, when consumers were faced with a sudden lack of supply, the trade war’s impacts could roll out in a more gradual and likely “erratic” way, as retailers sell through their existing stock.
“What we will see is that retailers in particular start to stock less product post-tariff, so there may be issues around supply when it comes to crossing the border, but there is generally no shortage of products,” he said.
Schotter cautions against the same kind of panic-buying and stockpiling that defined the early stages of the pandemic economy.
Tariffs may cool off over time, he says, and circumstances may change amid reactions from international trading partners and growing U.S. pressure on the Trump administration to change course.
“I don’t see the need to stock up for more than maybe a week or two,” he said.
“...We will see how the rest of the world reacts.”
You can watch the full interview with Andreas Schotter in the video at the top of this article.
U.S. President Donald Trump’s reciprocal tariffs on trading partners are set to take effect today, a day he has proclaimed as “Liberation Day” for American trade. CTV News has extensive coverage across all platforms:
- CTVNews.ca has in-depth coverage, real-time updates, and expert analysis on what the tariffs will mean for Canadians.
- CP24.com has developments out of Queen’s Park and what the tariffs mean for the people of the GTHA.
- BNNBloomberg.ca has what this means for the business community, investors, and the market.
