Saskatchewan watching closely for tariffs threatened by Trump

Canadian and Saskatchewanian lawmakers, manufacturers and economists will be watching closely this week as Donald Trump closes his fist around U.S. power.

The U.S president-elect has repeatedly threatened to slap a 25-per-cent tariff on all Canadian goods headed into the U.S., prompting Canadian leaders to make moves to try and stop that from happening.

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• Trump won’t wait to review CUSMA trade pact, experts say
• Canada’s energy minister says many Republicans don’t know Trump’s plans for tariffs
• Federated Co-op to pause canola crush and renewable diesel facilities

Business analyst Paul Martin said ahead of Trump’s inauguration on Monday that no one really knows right now whether those tariffs will come to pass.

“We have to play as though they are coming in, we have to be prepared to address that should it happen,” said Martin.

He said something as broad and significant as what Trump is threatening would be disruptive.

“Clearly, as an exporting province, Saskatchewan’s going to be paying a lot of attention to this. But, one of the things that maybe plays a little bit in our favour is the fact that, of all the provinces in the country the U.S. is their number one trading partner, but for Saskatchewan we are the least dependent on the U.S.,” said Martin.

Saskatchewan Premier Scott Moe has called such tariffs devastating.

Because the bread and butter of Saskatchewan’s economy is food, fuel and fertilizer, Martin said Saskatchewan has a more diverse set of customers besides the U.S. He said Saskatchewan relies less on the U.S. than other provinces for exports, but that may be a small solace.

“We are an exporter, so any time you get barriers put up between you and your customers it’s not going to play very well for you,” said Martin.

He said Canadians have heard numbers from other provinces about job losses, but it’s hard to say what the impact on the average person in Saskatchewan might be.

“Not only will average people in Saskatchewan or in Canada feel the impact of this because it’s going to be harder for us to sell our stuff, it’s going to be more expensive. The flip side is it’s also going to hurt working people in the U.S. because this is inflationary, it’s going to drive up prices,” said Martin.

Martin explained there can be a spiralling effect with measures like this and the tariffs could make things worse in the U.S.

“It’s a disruptive force and my guess is that they’ll probably give it a try but I don’t know how long they will last and just how deep the impacts will be,” said Martin.

Premier Scott Moe attended the first ministers meeting Wednesday to discuss relations with the U.S. and the threat of tariffs from incoming president Donald Trump. (CJME file photo)

Plan for retaliatory tariffs from Canada

The Canadian government said it’s ready to go with a retaliatory plan on Monday if tariffs are implemented, including billions of dollars in tariffs of its own.

Moe told Evan Bray that Canadian leaders should be operating as though Trump’s inauguration on Monday is the start of the conversation, not the end.

If tariffs are implemented, Moe said the next goal would be to get them removed as soon as possible, which could mean retaliation. “Walk softly, but carry a big list,” Moe said, paraphrasing former Premier Brad Wall.

“That list is a list of retaliatory tariffs that are designed, maybe not for maximum broad-based economic impact, but designed very specifically to impact decision-makers in the U.S.,” explained Moe.

The premier said he’s opposing broad-based tariffs, which he said would be bad for all Canadians and Americans. He said he would be against export tariffs as well.

Listen to the full interview with Moe here:

Martin said trade is a two-way street, and if retaliatory tariffs are introduced, it’ll raise prices on this side of the border as well.

“It’s kind of like when you’re in a boxing ring and you take a hit and you give one to your opponent — I guess there’s a victor in the end but, boy, there’s a lot of pain on the way when you’re getting there,” he said.

In the meantime, Martin said the Canadian dollar is a question in all of this. He said it isn’t very strong against the U.S. dollar right now, possibly because markets are anticipating the Trump tariffs, and the tariffs actually being imposed won’t help that.

— with files from CJME News

Read more:

• Trump won’t wait to review CUSMA trade pact, experts say
• Canada’s energy minister says many Republicans don’t know Trump’s plans for tariffs
• Federated Co-op to pause canola crush and renewable diesel facilities