THUNDER BAY — As a looming trade war between Canada and the United States appears to be heating up, the local business sector may find it difficult to plan, says the head of the city’s chamber of commerce.
U.S. President Donald Trump committed on Monday to slap a 25 per cent tariff on Canadian and Mexican goods entering the States starting on March 4. That comes after the expiration of a 30-day pause that started in early February.
“We've also heard some additional conversations over the last week or so about ‘well maybe they're going to look at lumber’ and we know they're looking at steel and aluminum,” Thunder Bay Chamber of Commerce president Charla Robinson said. “So, this is a very much an in-flux kind of a situation and making it very challenging for businesses to just be fully prepared.”
That, she said, will force companies to make tough decisions.
“I mean, at what point do you say, ‘OK, I'm going to still buy 100 widgets if the price went up 25 per cent,’” Robinson said, using a hypothetical situation. “Or is the person who's selling that — the business that's selling that to you — are you going to be coming back to them and saying, ‘well, I can only afford 50 widgets instead of 100 widgets.’”
“All of those pieces play into based on the cost, based on what is involved here for the businesses in the U.S. that would be buying these products.”
Regardless, Robinson said, the cost of doing business will go up, with the region’s forestry sector expected to be hit hard, she said, as that’s a major export product.
“Our forest companies are trying to figure out what does that look like and how would that potentially impact orders moving forward,” she said. “Whether that's on actual lumber or whether that's on things like their pulp, their paper, etc.”
The messaging from the chamber to local businesses has involved talking about diversifying markets and lobbying the provincial and federal governments “about how can we make it easier for businesses to sell within Canada,” Robinson said.
“So, breaking down provincial trade barriers — what can we do as provincial and federal governments to make a better competitive environment, lower tax rates, less bureaucracy, those kinds of things,” she said.
“That would help to offset some of the loss, potentially, of some of these customers in the U.S.”
Robinson added that they’re also keeping an eye on potential retaliatory tariffs Canada might impose and what impact they might have.
