The United States' attempt to secure a favorable deal through a tariff war will ultimately backfire, harming others in the process, said Canadian scholars.
On April 3, U.S. tariffs of 25 percent on Canadian automobiles came into effect, targeting the auto industry and the more than 500,000 Canadians this industry supports across the country, said a release issued by Canadian Finance Minister Francois-Philippe Champagne, adding that the United States also intends to apply 25-percent tariffs on certain automobile parts on May 3.
In response to the U.S. tariffs on the Canadian auto industry, Canada's new countermeasures have come into force on Wednesday. The new measures include a 25 percent tariff on non- Canada-U.S.-Mexico Agreement (CUSMA) compliant fully assembled vehicles imported into Canada from the U.S., as well as a 25 percent tariff on non-Canadian and non-Mexican content of CUSMA compliant fully assembled vehicles imported into Canada from the U.S, according to announcement of Mark Carney, Prime Minister of Canada, on April 3.
Experts warn that the U.S. tariffs are likely to severely disrupt the international trade order and inflict harm on all parties involved — including the United States itself.
"Tariffs are going to hurt everybody who's affected. The tariffs will also hurt the Americans," said Nelson Wiseman, a Professor Emeritus of Political Science at the University of Toronto.
Another expert warned that the tariff hike would trigger the return of inflation, rising costs and job losses.
"The American people are going to feel it. We just beat inflation, and now it's going to come back with its ugly head because costs are going to rise, prices are going to rise and there is a major compromise of the ability of the working people and people and consumers to be able to afford and they're being hit on both sides. Higher costs for whatever they buy and they are going to lose their jobs," said Atif Kubursi, a Professor Emeritus of Economics at McMaster University.
Pedro Antunes, Chief Economist at the Conference Board of Canada, noted that the United States' repeated tariff hikes have significantly undermined its competitiveness and production capacity.
"This is very, very hurtful to the U.S. economy. You cannot have an economy, a more insular economy kind of survive on its own and be competitive on its own. Time and time again, tariffs have shown that essentially they erode the competitiveness and the productive capacity of an economy. So, to answer your question, I think it's painful for all the economies. But just as much for the U.S. I think in the long run, this is just as bad for the U.S. economy," he said.
US tariffs benefit no one, will ultimately backfire: Canadian scholars
US tariffs benefit no one, will ultimately backfire: Canadian scholars
