WASHINGTON — This week, Canada’s energy minister made a trip to the U.S. Capitol to alert lawmakers about potential tariffs proposed by President-elect Donald Trump. He cautioned that such tariffs would not only harm Canada’s economy but would also have dire consequences for American citizens, resulting in increased prices and job losses.
Jonathan Wilkinson, who oversees energy and natural resources in Canada, felt it was essential to raise awareness about the inflationary threats posed by a president who campaigned on reducing prices. According to him, if Trump proceeds with tariffs, it would lead to higher costs for Americans, directly impacting gas, food, natural gas heating, and electricity prices — a stark contrast to Trump’s promises during his campaign.
Trump’s administration has discussed the possibility of imposing hefty tariffs of 25% on imports from Canada and Mexico, as well as potential tariffs on goods from China and Europe. This has led to speculation about whether these threats represent serious policy changes or merely a strategy for negotiation.
In recent statements, Trump and his aides have reiterated their commitment to implementing tariffs on various countries while minimizing concerns about potential inflation. Karoline Leavitt, a spokesperson for Trump, emphasized that in his first term, the president’s previous tariffs resulted in job growth and did not significantly contribute to inflation. She stressed that Trump aims to reinvigorate the American economy by prioritizing American workers and energy independence.
In response to potential U.S. tariffs, Canada is contemplating its own retaliatory measures, which could target products such as orange juice, toilets, and certain steel items. Following Trump’s initial round of tariffs during his presidency, Canada had imposed substantial duties on American goods as a counter-move. Although the trade dispute did raise costs for some sectors, it did not lead to widespread inflation throughout the economy.
However, should Trump proceed with tariffs that target Canada, it may disrupt key markets for industries such as automotive, lumber, and oil, negatively affecting American consumers swiftly. Wilkinson pointed out that this path could lead to elevated living costs in the U.S. without yielding any benefits for its citizens.
Wilkinson’s political ambitions are also a topic of interest, as he is considering running for leadership within the Liberal Party following Prime Minister Justin Trudeau’s recent announcement of his resignation. He plans to make a decision regarding his candidacy soon.
While Trump intends to announce tariffs shortly after his inauguration, the specifics of these measures remain unclear. There is speculation that he may simply declare intentions for tariffs, establish a phased approach, or even declare an economic emergency to justify increased import taxes.
In a session held with Canada’s provincial leaders, Trudeau reiterated that “nothing is off the table” concerning reactions to Trump’s tariff threats, emphasizing that no single region should be disproportionately affected.
Despite Trump’s intentions to act unilaterally, Democrats are stepping in to propose legislative restrictions aimed at curtailing the president’s tariff authority. Reps. Suzan DelBene and Don Beyer introduced bills designed to modify the International Emergency Economic Powers Act, which presently grants the president powers to impose sanctions against foreign threats deemed emergencies. DelBene described the proposed tariffs as a “nationwide sales tax” that would burden families with elevated prices, characterizing the situation as a trade war.
Contrary to Trump’s assertion that the U.S. can afford to bypass Canada, it’s worth noting that Canada supplies around 25% of the oil consumed daily in the U.S. Wilkinson also mentioned that the repercussions of tariffs could lead to job losses in U.S. sectors that process Canadian energy, particularly in the Midwest and Gulf states.
The conversation surrounding potential tariffs is intensifying amid growing anxieties about their economic impact and inflationary pressures within U.S. business circles and the Federal Reserve. The Fed has indicated concerns that these tariffs may contribute to a slight increase in inflation rates, and officials are closely monitoring the situation.
Neel Kashkari, the president of the Minneapolis branch of the Federal Reserve, shared that while a singular tariff may not drastically worsen long-term inflation, reciprocal actions from other countries could complicate forecasting and deepen inflation concerns. Ultimately, Wilkinson noted that the focus should be on avoiding a tariff-focused discussion, which he believes is a detrimental strategy for both nations.
