August 17, 2018 — American-initiated tariffs are impacting Canadian seafood businesses in unexpected ways.
The growing trade war between the United States and its neighbor to the north began with a 25 percent surcharge on steel and aluminum initiated in May by the administration of U.S. President Donald Trump.
In reaction, Ottawa used the symbolism of Canada Day to launch CAD 16.6 billion (USD 12.6 billion, EUR 10.8 billion) in retaliatory tariffs strategically targeted to products like orange juice, yogurt, coffee, soya sauce, mayonnaise, and bourbon, which are produced in the home districts of key Republican allies of President Trump.
As a result of this, Galen G. Weston, CEO of Loblaw Companies, Canada’s largest food retailer, believes the trade war may result in higher prices for retail goods sold in Canada.
“We see a very strong possibility of an accelerating retail price inflation in the market,” Weston said at a recent press conference. On the upside, he added, “We don’t think it’s going to be meaningful [or] super significant, but it certainly will be higher than what it is today.”
Krishen Rangasamy, an economist with the National Bank of Canada, agreed the Canadian tariffs won’t have an overly significant impact on consumer prices. He thinks importers are unlikely to pass on higher prices and those that do will have minimal impact on the consumer price index, around 0.01 percent. However, Karl Littler, a representative of the Retail Council of Canada, suggested in the Financial Post that already-thin retail margins will mean prices have to rise, but not by the full 10 percent Canadian tariff of targeted goods.