Washington: US President Donald Trump was threatening to impose tariffs on Canada and Mexico. By imposing a 25 percent tariff on Canada and Mexico, Trump has now proved that he does not just threaten. However, only a 10 percent tax will be imposed on Canada's energy resources. The announcement of tariffs by Trump is going to create big problems for Canada's economy as well as Trudeau's political career. Trudeau threatened after Trump's announcement, saying, 'We did not want this, but if the US goes ahead, we will also take action.'
According to a BBC report, economists have said that this move could have a devastating effect on the Canadian economy, as well as American consumers may have to pay higher prices. Trudeau said in his television address, 'I would not call this situation easy. Our country may have to go through difficult times in the coming days and weeks.' Canada wants to completely avoid a trade war with the US. This is why it has planned to spend more than $690 million on the border with the US. However, Trudeau has said that all options are open.
What can Canada do?
Tax on American goods: Canada has fought a tariff war with the US during Trump's previous term as well. In 2018, Trump imposed a 10 percent tariff on Canadian aluminum and 25 percent on steel. In response, Canada also imposed tariffs on Florida orange juice, and Tennessee and Kentucky whiskey. This time too, Canada can impose tax on selected American goods. This is considered a safe method.
Dollar-for-dollar tariff: Last time, Canada imposed a dollar-for-dollar tariff on American products. That is, the amount of tariff imposed by America on Canadian exports, Canada imposed the same amount on American goods. However, the entire Canada does not agree with this. Saskatchewan state leader Scott Moe has said that increasing tariffs on American goods will break the country. Julian Karagusian, an economics lecturer at McGill University in Montreal, says that such tariffs can increase inflation and unemployment in Canada.
Restrictions on energy supply: The best option Canada has to fight America is energy. North-eastern American states like Vermont, New York, and Maine are dependent on electricity sold from Canada. 30 states of America buy some electricity from Canada. Canada is the largest supplier of crude oil to America. 60 percent of crude oil in America comes from Canada. Ontario's premier Doug Ford had suggested that Canada should stop supplying energy to the US. Canada can harm the US with this controversial move. However, Canada's oil-rich province of Alberta has refused to stop the energy supply.
No response: Doug Ford had also suggested that American liquor should be removed from the shops of some provinces of Canada. Another option is that Canada should not take any action for now. Canadian officials are continuously meeting with American counterparts. On Wednesday, Canadian Foreign Minister Melanie Jolie met American counterpart Marco Rubio and gave the message that tariffs would not be good for both countries. Many experts suggest that Canada should focus on diversifying its trade relations and increasing domestic production.
