How will the tariffs on American products affect the national budget of Canada?

Trump thinks tariffs are “great” but as his increasing tariffs might sound great to his base of supporters there are international consequences to be aware of.

Improving a domestic economy by taxing imports might sound like a great idea for Trump, it is the equivalent of denying access to the largest economy in the world in order to get concessions from weaker allies who will certainly retaliate. This can have the effect of starting a tit-for-tat trade dispute that can escalate into a full blown trade war with the expectancy that the weaker economy will collapse first. A game of chicken or Russian roulette if one prefers with grave consequences for millions of consumers when in reality the simple issue is: Americans buy foreign products, just as other nations buy American-made products and crops resulting in what is known as international trade. Because of a of largely mechanized agricultural production of massive scale in the US the agricultural community depends on foreign buyers each year. So, retaliation to agricultural tariffs is a losing proposition for this industry.

The Chinese retaliatory tariffs of 25 percent on soybeans, in response to Trump’s $34 billion in tariffs on Chinese products, has shaken the cash market of soybeans as the spot market price tumbled 20 percent so far.

Steel and aluminum is another industry of concern, since Canada is one of the United States’ biggest trading partners, the retaliatory tariffs are certainly something to pay close attention to as Trump’s trade policy wobbles directionless. Canada has taken the initiative of inviting trade ministers from the EU and other countries for a WTO summit in Ottawa, however, Trudeau did not invite the US trade representative for Trump has manifested he wants to do away with this international trade body of trade rules which the US had a major role in founding!

Many American business leaders are legitimately concerned that these unprecedented Trump wobbling positions on trade can negatively affect the entire world of financial markets falling into recession or worse yet, a runaway inflation. Although, many consumer goods such as foods and beverages may have been produced domestically, they require imported steel or aluminum for their packaging. The resulting higher costs of manufacturing will adversely affect profits resulting in higher consumer prices at the grocery store. Analysts like Dan North state that “the roughly 150,000 jobs that could potentially be saved in steel and aluminum industries is dwarfed by the nearly 2 million jobs at risk in industries that use imported steel and aluminum" which again, will be passed on as higher prices for the end consumer ensuing inversely proportional to Trump’s intent!