Trump’s tariffs on Canada are coming. How soon could prices rise? – National

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Trump’s tariffs on Canada are coming. How soon could prices rise? – National

U.S. President Donald Trump’s threatened tariffs on Canada are still set to come on Saturday, the White House has confirmed.

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With Ottawa expected to respond with retaliatory tariffs, how long will it take before you feel the impact on the foods and items you purchase?

“The impact could be immediate depending on the sector,” said David Dienesch, the CEO of Allianz Trade in Canada, a company that specializes in supply trade insurance.

He added, “There are concerns that any oil and gas tariffs will result in a potential increase in gasoline prices in the USA by $0.75 a gallon. Therefore, any transportation costs for goods coming into Canada from the USA would be impacted. Companies need to pass on the increases, especially for lower margin products.”

On Thursday, Trump said ********* oil and gas “may or may not” be included in the tariffs.

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“We may or may not. We’re going to make that determination probably tonight on oil,” Trump told reporters at the White House. “We’ll see. It depends on what the price is. If the oil is properly priced, if they treat us properly — which they don’t.”

Tu Nguyen, economist at RSM Canada, said Canada’s retaliatory tariffs could also have an impact on prices.

“The impact will vary widely based on several factors, including which goods are included, whether there are ********* substitutes, and how much of the tariffs are passed on to consumers. If Canada retaliates, prices of many U.S. imports would jump,” she said.

Sylvanus Afesorgbor, a professor of agri-food trade and policy at the University of Guelph, said Canadians will feel the impact of tariffs on grocery store shelves fairly quickly.

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“We import about 60 per cent of our food from the U.S. If we imposed reiterated tariff, it means that price of food is going to go up by the amount of the tariff,” he said.

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Nguyen said some grocery products will get costlier a lot faster.

“Goods that have no close ********* substitutes and are perishable would see the increases first. These include fruits and vegetables, which Canada imports quite a bit in the winter months. Businesses cannot stock up on perishables the way they do with non-perishables, therefore the impact would be felt almost right away,” she said.

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Dienesch said Canadians who buy normally cheaper, processed food could feel some economic pain.

“We send grains to the USA which could be tariffed. The U.S. producer then has to re-export the food that was processed. That food could also have ********* tariffs imposed as it crosses the border back into Canada,” he said.

Afesorgbor said some products, like cereal, may not see steep increases right away since grocery chains often have such goods in storage and can draw on some level of supply.

However, he said in addition to vegetables, fruits and prepared foods, Canada also imports live animals from the U.S. and this could impact the price of meat and dairy products.

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Experts have warned that the Canada-U.S. supply chains are so interlinked, any kind of tariffs could put inflationary pressure on both economies.

“Goods with parts that cross the border multiple times, such as cars, will also see increases in prices. The integrated North American supply chain means that some car parts are only produced in Canada and others only in the U.S. If these parts are subject to tariffs each time they cross the border, the increase in prices would be noticeable,” Nguyen said.

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Erik Johnson, senior economist at BMO Capital Markets, said the ********* dollar is likely to take an immediate hit.

“The foreign exchange market is certainly going to be the first thing that would react to any imposition of the tariffs,” he said, adding that the weakening loonie would impact the ability of Canadians to buy anything directly from U.S. sellers.

Johnson said Canadians who are looking to buy used cars from the American market will have a hard time finding a good deal with a weaker loonie.

“The wholesale (used car) market is much ******* in the U.S. than it is in Canada. You would face those exchange rate changes immediately,” he said.

How long would prices stay higher?

Johnson said whether Canada sees sustained price rises or a one-off spike depends on how long any ****-for-tat trade war between Ottawa and Washington lasts.

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“If it’s just like a one-off increase in prices, that could roll through official inflation statistics relatively quickly,” he said.

However, some economists fear the inflationary pressure would last longer.

“How long inflationary pressures would last depends on how quickly consumer behaviour shifts, and how well Canada’s and global supply chains could adapt,” Nguyen said.

“Some goods would see a one-time permanent price jump while others with more complex supply chains would see prices rising and adjusting over time.”

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