From California-grown tomatoes to shampoo, Canadians could feel the impacts of Ottawa’s retaliatory tariffs against the U.S. on their wallets in mere days, experts say.
Hours after U.S. President Donald Trump imposed 25 per cent tariffs on all Canadian imports into the U.S., the Canadian government announced counter-tariffs on $30-billion worth of American-made goods, including citrus, poultry, eggs, diary and coffee. A much longer list targeting $125 billion in U.S. goods is in the works, with officials conducting a 21-day consultation on a proposed draft.
“Canada will not stand by as the United States imposes unwarranted and unreasonable tariffs on Canadian goods,” the nation’s Department of Finance said in a news release Tuesday.
While Ottawa said it devised its initial response to Trump’s aggressive trade policies to include as many products with Canadian-made alternatives as possible, Canadian consumers could see a larger and more immediate price impact from our own counter measures.
The higher costs could be compounded by the “modest recession” economists expect Canada to see as a result of the trade war, with the hardest-hit sectors laying offs droves of workers due to declining demand and investments from U.S. markets and a plummeting loonie that will likely ratchet up inflation.
Experts who spoke to the Star Wednesday pointed to two groups of products that will likely see the soonest price jumps as a result of Ottawa’s retaliatory measures: produce and personal-care items.
Because these goods aren’t easily sourced in Canada and have few non-U.S.-made alternatives, Canadians should expect prices to go up “very quickly” on these items once the current available supply on store shelves runs out, said Michael Graydon, CEO of Food, Health and Consumer Products of Canada.
“It will likely come in at close to a 25 per cent increase because that is, in fact, what will be applied to those products,” he said.
For produce — tomatoes, oranges and berries are some of those targeted by the counter-tariffs — the rising costs could be particularly hard to avoid since much of the fruit and vegetables sold in Canadian grocery stores are outsourced at this time of year.
“There’s just not enough in Canada given our very short growing season here,” Graydon said. “We do have to, on a regular basis, access those markets.”
Grocery giant Loblaw is preparing to speed up the way it handles price increases to six weeks from 12 to make it easier for suppliers to recoup tariff costs. While helpful to those in the food industry, the cutting of regulatory red tape means consumers will likely start to see higher grocery prices sooner.
Meanwhile, many of the cheaper shampoo, toiletry and shaving cream items Canadians rely on for their personal hygiene will likely be hit hard because they come from the U.S., according to McGill University business professor Saibal Ray. Higher-end products from more luxury brands would likely be spared because they are sourced outside of the U.S.
The impact on peoples’ pocketbooks from counter-tariffs on beauty products could be felt earlier than those on produce, he added.
“I think most of these products there is not more than one week or 10 days of stock,” Ray said, explaining that stores typically have fewer of the cheaper, U.S.-made products in their inventories because they could historically rely on quick transportation times.
Ray also sounded the alarm on clothing and apparel items, although he noted that many of the cheaper brands could be spared as they’re sourced directly from Asia.
