Could Trump Tariffs Against Canada Lead to Trade War?

UB professor: fears of job losses in steel, automotive industries

Tom Puckett
June 14, 2018 - 4:00 am

Buffalo, NY (WBEN) UB Canadian Studies professor Munroe Eagles says the US tariffs against Canada are causing real fears about job loss, and the possibility of an escalating trade battle between the two neighbors.

Eagles says things have changed significantly since NAFTA in the early 1990s. "The economies of Mexico, Canada, and the US have become so intertwined that we now face a situation that looks more like a continental economy than three separate economies," says Eagles. "When you talk about trying to dismantle that, you're doing serious violence to the progress that's been made since the adoption of NAFTA."

Eagles says there's a trade imbalance if you just look at merchandise, as President Trump claims, however, if you add in business services, the US has a trade surplus with Canada. 

Eagles says Canadian lawmakers have united to vote unanimously to retaliate against the US for the tariffs. One of the reasons why is the impact on the steel industry. "The steel and aluminum tariffs are serious and will have some significant impact on jobs in Canada," says Eagles. He says there will likely be job losses among the 32,000 jobs in those industries. But there is one more real fear. "That's the threat to impose a 25 percent tariff on automotive imports from Canada," notes Eagles.

Eagles says the prospects of the trade war escalating are quite serious. 

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