The United States government has paused its tariffs on some incoming Canadian products, just two days after invoking a new 25 per cent import tax. This temporary ceasefire in an unwelcome trade war is scheduled to expire April 2, and applies only on goods deemed to be “compliant” with the Canada-U.S.-Mexico Agreement (CUSMA) on Trade. Nevertheless, it appears Canada has already made gains in the battle for public sentiment as more Americans begin to grasp what the fallout from tariffs could entail.
Speaking in Washington, D.C. yesterday, a delegation of Canadian parliamentarians sketched out the rising costs and broader economic destabilization that can be expected from a hefty surcharge on materials and products that are integral to U.S. manufacturing, agriculture and consumers’ day-to-day lives. And some of their American legislative peers reiterated that message.
“These tariffs are going to be very, very harmful to the U.S. economy. This isn’t a chisel; it’s a sledgehammer,” said Minnesota Senator Amy Klobuchar, one of the American co-chairs of the Canada-U.S. Inter-parliamentary Group (IPG). “I like to emphasize what American businesses have said. The National Association of Manufacturers warned that this is going to put American manufacturing jobs at risk. The American Farm Bureau warned that they threaten to deliver another blow to the finances of farm families. The National Association of Home Builders said they will increase home prices by raising the cost of construction materials. The U.S. Chamber of Commerce, not exactly a liberal group, has said that tariffs will only raise prices for American families and upend supply chains.”
The binational IPG was jointly established by the governments of Canada and the U.S. in 1959 with the purpose of encouraging an exchange of information and discussion around issues where the two countries may converge or diverge. The group has met formally at least once annually for the past 65 years, but the members have also routinely conferred on issues of mutual interest. It currently has four co-chairs and 25 members, including 12 Members of Parliament (MPs), five Canadian Senators, six U.S. Representatives (Congress) and two U.S. Senators.
A delegation from Canada’s IPG membership spent two days meeting with its American counterparts and various other influencers in the U.S. capital earlier this week before capping off the visit with a panel discussion, broadcast online from the Wilson Center, a non-partisan think tank on global affairs and U.S. foreign policy. During that event, John McKay, a Liberal MP from Toronto and one of the IPG’s Canadian co-chairs, recounted how one of those meetings with a tariff-supporting U.S. legislator took a different turn when he received input from a constituent who expected negative business consequences.
“This particular constituent landed the points that we (Canadian legislators) couldn’t land — that this is going to have significant impact on Americans,” he observed. “I think it’s useful for Congresspeople and Senators and others in the Administration to appreciate that the actions will result in significant costs to Americans. As those costs actually start to land in the grocery basket and the factory floor, maybe there will be a change of attitude.”
McKay’s Canadian co-chair, Nova Scotia Senator, Michael MacDonald, noted that the U.S. government’s imposition of tariffs on steel and aluminum in 2018-19 resulted in an estimated net loss of 74,000 jobs in the United States — 1,000 jobs gained directly in steel and aluminum production versus 75,000 lost in the industries that rely on steel and aluminum inputs. He also theorized that the first 100 days in office can be a time when governments are conscious of making a forceful impression and others are still watching to see what will unfold.
“We’re only in the first half of the first hundred days so maybe patience is a virtue to a certain extent,” MacDonald mused. “Let’s just see how this evolves over the next few weeks. I think there’s a lot of balls in the air and we’ll have to see how they drop.”
Meanwhile, the IPG’s other American co-chair, Representative Bill Huizenga, a Republican from Michigan, defended the U.S. Administration’s focus on border security and its agenda to boost manufacturing and energy production within the U.S. He also highlighted what the U.S. sees as trade irritants with Canada related to dairy products, lumber and the digital services tax.
That said, Huizenga has been well placed to communicate his overall support for CUSMA to the decision-makers on tariffs. Nor is that a stance that is currently unique within the Republican party.
“We have been expressing some of our issues and concerns about where is this going and how it is playing out,” he reported.
McKay, in turn, commended Huizenga’s efforts to appeal to U.S. Secretary of Commerce Howard Lutnick. “It does appear to have postponed some of the more egregious aspects of the tariff on the automotive industry,” he said.
