By John Q. Hosedrinker 
In response to President-elect Trump’s threatened 25% tariffs on all Canadian goods, Canada is preparing retaliatory tariffs on various American products, including orange juice, toilets, and steel. This response mirrors Canada’s actions in 2018 when similar tariffs were imposed. The proposed Canadian tariffs aim to counter Trump’s economic coercion tactics and his inaccurate claims regarding Canadian resource dependence. High-level Canadian officials have dismissed Trump’s suggestion of Canada becoming the 51st state as a serious negotiating tactic, characterizing it as a distraction from the economic implications of his proposed tariffs.
Read the original article here
US orange juice and steel are prime candidates for Canadian retaliatory tariffs if President Trump decides to impose tariffs on Canadian goods. This isn’t a new tactic; Canada employed a similar strategy during Trump’s previous attempts at trade wars, targeting businesses connected to Trump’s allies and key employers in states crucial to his support base. This approach aimed to pressure the President through political channels, influencing governors and ultimately shaping his decisions.
The potential impact on the US economy is significant. Canada is a major supplier of crude oil to the US, providing 60% of its imports. Imposing tariffs on Canadian energy could quickly raise fuel prices, potentially sparking widespread public discontent and impacting various sectors reliant on affordable energy. Beyond oil, the inclusion of steel highlights a critical industry. Tariffs on Canadian steel would disrupt supply chains and impact manufacturing businesses in the US.
The inclusion of orange juice in potential retaliatory tariffs is noteworthy. It represents a strategic choice by Canada targeting a specific industry and region of the US—Florida—known for its orange juice production and significance within a particular political demographic. This underscores the calculated approach by Canada in targeting areas that might exert political pressure on the Trump administration.
Beyond economic implications, the potential for escalation is a major concern. Canada’s response, particularly including energy and possibly electricity, suggests a willingness to employ significant leverage to counter any aggressive trade moves from the US. This could lead to a full-blown trade war with far-reaching implications for both countries and potentially the global economy.
Some commentators suggest this situation is a diversion tactic, designed to shift attention away from other crucial issues. Others point to the President’s limited understanding of economic policy, highlighting his misunderstanding of how tariffs function, believing they are solely borne by exporting nations rather than impacting consumers. This fundamentally flawed understanding underpins the potentially disastrous consequences of his trade policies.
The anticipated impact on American consumers is considerable. Higher gas prices due to oil tariffs are inevitable. The price of orange juice, already relatively expensive, would likely increase further if Canadian retaliatory tariffs are implemented. These increases could disproportionately affect lower-income households and further fuel public dissatisfaction.
The potential ramifications extend beyond economic factors. The retaliatory measures could escalate tensions between the two countries, jeopardizing the long-standing amicable relationship. This strain could negatively affect collaboration on various fronts, including defense and security cooperation within the “Five Eyes” intelligence alliance.
Concerns about the ripple effects on other industries are valid. The potential for tariffs on other goods, such as bourbon, raises alarm bells for various sectors. Such measures would not only impact individual businesses but could lead to layoffs and economic hardship in affected regions, potentially further destabilizing an already uncertain economic landscape.
While some believe that retaliatory tariffs on orange juice might lead to increased supply in the US domestic market, potentially lowering prices, this outcome is far from certain. The impact on the Florida orange juice industry would be severe, leading to job losses and potentially causing significant economic damage to the state.
Ultimately, the situation highlights the potentially disastrous consequences of impulsive and poorly informed economic decision-making. The proposed tariffs, whether from the US or Canada, risk substantial economic disruption, political upheaval, and damage to the vital relationship between two traditional allies. A more reasoned and collaborative approach is crucial to avoid a trade war with far-reaching negative impacts.