Trade War Ramifications
CBJ — If the trade wars between the U.S. and Canada continue to escalate there is no telling just how badly it will stifle the Canadian economy. But most financial experts mostly seem to agree on one thing: it will plunge the entire North American economy into a tailspin recession. It’s estimated Canada’s economy would shrink by about 1.8% for the 2020 fiscal year.
Financial analysts, including some very experienced economists have been trying to ascertain the severity of the economic consequences of the intensifying trade fight between the Trump administration and traditional American allies like Canada.
It’s been well documented how the U.S. already has slapped a 25% import tariff on steel coming from Canada and also a 10% fee for aluminum. The Americans also hit out against Mexico and the European Union in the same manner.
Now there is talk of a 25% tax being put on automobile imports. If that were to happen, the move would decimate the auto industry in Ontario, where virtually all manufacturing is done.
With negotiations clearly not working, Canada and other countries have been prompted to retaliate with tariffs of their own on U.S. imports. But that is likely to cause the U.S. to strike back yet again, as it has done against China. Just a week ago President Trump announced another tariff up to $50 billion on goods being brought into the U.S. from China. The tariffs are set to take effect July 6.