Francois-Philippe champagne, Canada’s Finance Minister, said that Canada may have to pay a “baseline tariff” to export goods to the United States. He made these remarks after US President Donald Trump said in his State of the Union Address that tariffs may eventually replace income tax as the main source of revenue for the United States.
Champagne said that the view from a global perspective is very clear. Every country has to pay a certain price in order to gain access to the US market. Canada pays the least.
Discussions between Trade Officials on Possible Tariff Adjustments
Jamieson Greer, the US Trade chief said that Canada may have to accept higher tariffs to gain access to American markets.
Greer said that, if Canada agreed to increase tariffs on some goods and the US opened its market to items like dairy products, this could result in a positive trade dialogue.
Canada Diversifies its Export Strategy
Mark Carney, the Canadian prime minister in response to tensions on trade, has outlined plans to double Canada’s non-US imports within a decade.
Canada exports around 75% to the US.
The US has replaced previous policies with new tariffs
This section allows the President to set tariffs of up to 15% during the 150-day period before Congress has to act.
The tariffs paid by other countries could reduce the tax burden on Americans, according to President Trump.
What this means for Canadian businesses
Canadian exporters will face increased costs but the government is trying to find a balance between accessing the US market and expanding exports to other countries. While Canada is strengthening its international trade, accepting some tariffs may be the best option.
