'Slight sigh of relief' from Manitoba industries as Canada exempt from most new tariffs, but fears remain

Industry leaders in Manitoba are relieved Canada is spared from the new "retaliatory" tariffs the United States levelled Wednesday on dozens of countries, but it doesn't mean the country's economy will be left unscathed.

U.S. President Donald Trump released his long-feared plan for tariffs against a list of countries Wednesday, but the minimum tariff of 10 per cent on all imports won't apply to Canada and Mexico. Previously announced border-related tariffs will continue to apply instead.

But given the interconnectedness of global supply chains, the repercussions of the new tariffs will be felt in Canada, albeit indirectly, said Andrea Ladouceur, president of the Bioscience Association of Manitoba.

Some Canadian businesses have manufacturing facilities in the countries now being targeted by Trump's across-the-board tariffs, she said.

"They will be impacted financially," she said, "and those companies employ Canadians."

Ladouceur is also worried from a humanitarian perspective. Tariff rates in the double-digits have been applied to some countries with underdeveloped economies, which will struggle to handle an economic broadside of that magnitude, she said.

"We know they have a lot of manufacturing related to garments and other things, and for them to get another heavy impact financially … is really hard to watch," said Ladouceur.

While the new 10 per cent baseline tariff doesn't apply to Canada, Trump still followed Wednesday on a promised 25 per cent tariff on "all foreign-made" automobiles, as of midnight ET Thursday.

The existing tariffs on steel and aluminum will remain in place.

'Still a little shocked': lumber industry rep

The fact other imported goods to the U.S. aren't subject to new levies brought a "slight sigh of relief" from the representatives of the Manitoba government's U.S. Trade Council, which held a virtual meeting after Trump's announcement, said Ladouceur, who sits on the council.

Liz Kovach, president of Supply-Build Canada — which represents lumber retailers — said she wasn't expecting her industry to be exempt.

"I'm still a little shocked by this news," she said Wednesday afternoon.

"I was not expecting this, but I am happy to hear that … they realized that the tariffs are really a bad idea, and they are an additional tax that the U.S. customer would have to pay."

Cam Dahl, general manager with Manitoba Pork, also expressed relief, though he was quick to acknowledge a U.S. president known for changing his mind could do so again.

In the meantime, "we need to continue to look for opportunities to diversify our markets," Dahl said.

"We need to continue to break down interprovincial barriers, and we need to continue to reach out to our partners in the U.S. to work together to get that message across that we're better off as partners as opposed to opponents."

A representative with the manufacturing industry echoed that.

"The reality is this could change tomorrow," added Terry Shaw, Prairies vice-president for the Canadian Manufacturers & Exporters Association.

Canada needs "to safeguard against these tariff threats, and to mitigate some of the possible damage that could come," he said.

Manitoba Chambers of Commerce president Chuck Davidson said the continued uncertainty is impeding decision-making and drying up orders for some businesses.

"I think there's no question that we need to continue to look at how do we become less Trump-reliant and less U.S.-reliant," said Davidson.

New U.S. tariffs don't hit Manitoba as badly as feared, but worry lingers

21 days ago

Duration 1:27

Industry leaders in Manitoba are pleased Canada has been spared from the new blanket tariffs imposed on dozens of countries by the United States, but they stress the uncertainty from the trade war hasn't gone away.