Tariffs and Trump

By Sara Nicholls

Tariffs have been a common way for states to shape their economic policies. Since Canada is a trade-focused nation, it uses tariffs to help its domestic industries and control its trade relationships (Government of Canada, 2023). Yet, the idea of tariffs is still debated, mainly because of Canada’s involvement in global economic liberalism and its membership in the World Trade Organization (WTO) and the United States-Mexico-Canada Agreement (USMCA) (Global Affairs Canada, 2021). Canada’s tariffs are generally much lower than those of developing countries. Even so, they are found on a variety of goods, mainly agricultural products and some manufactured items. They are meant to help domestic producers who could be outcompeted by less expensive foreign goods. For example, dairy and poultry products are protected by a supply management system involving quotas and high import tariffs (Canadian Dairy Commission, 2022). While this benefits Canadian farmers, it often results in higher prices for consumers and can complicate trade negotiations with countries seeking greater access to Canadian markets (OECD, 2020).

Some argue that Canada’s relatively limited use of tariffs could hinder long-term innovation and competitiveness. Protected industries may lack incentives to modernize or cut costs (Conference Board of Canada, 2019). Additionally, tariffs may provoke retaliatory measures from trade partners, leading to disputes and damaging Canada’s global economic relations (WTO, 2022). Still, in times of economic instability or global supply chain disruption, tariffs and trade protections may be necessary to secure domestic food supplies and protect jobs (Agriculture and Agri-Food Canada, 2022).

Overall, Canada’s tariff policy attempts to balance support for its domestic industries with its international trade obligations. Although not widespread, Canada’s tariffs in specific sectors continue to raise debate regarding their effects on consumers, producers, and trade negotiations.

References

• Agriculture and Agri-Food Canada. (2022). Overview of Canada’s supply management system. https://agriculture.canada.ca
  
  

• Canadian Dairy Commission. (2022). Supply management. https://www.cdc-ccl.gc.ca
  
  

• Conference Board of Canada. (2019). The impact of trade protectionism on Canadian industries.
  
  

• Global Affairs Canada. (2021). Canada and the World Trade Organization. https://www.international.gc.ca
  
  

• Government of Canada. (2023). Tariff information by country. https://www.cbsa-asfc.gc.ca
  
  

• OECD. (2020). Agricultural policy monitoring and evaluation: Canada. https://www.oecd.org
  
  

• World Trade Organization. (2022). Trade policy review: Canada. https://www.wto.org

This week’s featured submission is by Sara N., a motivated undergraduate student pursuing a degree in Public Policy and Political Science at Carleton University. Her academic interests include international relations, economic development, and evidence-based policymaking. Sara is passionate about contributing to meaningful policy discourse and aspires to a career in public service or policy research.