Throughout U.S. President Donald Trump\u2019s volatile second term, Canada has enjoyed a relatively advantaged position when it came to trade access to the world\u2019s largest economy \u2013 one that made it the envy of many other countries.<\/p>\n
If Mr. Trump\u2019s latest volley of tariffs against this country take effect next month, much of that benefit would evaporate, leaving Canada\u2019s average effective tariff rate \u2013 a measure of duties collected as a share of total imports \u2013 just a notch behind that of France and Vietnam. <\/p>\n<\/p>\n
\u201cCanada\u2019s relative tariff advantage will shrink, but remain intact, if 338 levies are introduced,\u201d National Bank of Canada economists Taylor Schleich and Ethan Currie wrote in a note. \u201cThis advantage has already stepped down from its \u2018peak\u2019 in Oct-25, when Canada\u2019s tariff rate was 7 percentage points below the global average.\u201d<\/p>\n
There are a lot of \u201cifs\u201d in any discussion of the new tariffs that Mr. Trump has threatened to apply against Canada under Section 338, a Depression-era provision that the U.S. has never used.<\/p>\n
The 50-per-cent tariff on more than 500 categories of products is set to take effect on Aug. 19, and would apply to 5 per cent of Canada\u2019s 2025 shipments to the U.S., or $20.1-billion worth of goods.<\/p>\n
However, many economists, and even some of the companies that would be hurt by the punishing new duties, view Mr. Trump\u2019s threat with a skeptical eye<\/a>, chalking it up to a negotiating tactic.<\/p>\n That said, even the potential for Canada and Vietnam to share a similar-sized tariff wall speaks to how much the global trading order has shifted.<\/p>\n