BUFFALO, N.Y. — Canada’s latest round of retaliatory tariffs are now in effect, and with the state of New York sitting directly on the border, local businesses and consumers could feel the effects.
The impact of this trade fight goes well beyond the U.S. — Canadian border. Canada is now imposing tariffs on about $20 billion worth of American goods, and the effects could eventually reach businesses, workers and consumers here in New York.
Canada said its new tariffs are a direct response to the latest U.S. trade measures. The duties range from 15% to 50% and cover hundreds of American products, including steel and aluminum. For a border state like New York, finance professor Scott Laing said the uncertainty alone can make it harder for businesses to plan.
“American products might seem a little less enticing to Canadian shoppers,” said Laing. “If it costs more for Canadians to import materials from the United States, there might be less demand for those materials and for those items.”
But perhaps nowhere is that supply-chain uncertainty more complicated than the auto industry. Cars aren’t simply built in one place, with parts and materials crossing the border multiple times before that vehicle reaches a dealership. Laing said decades of North American auto manufacturing have created an incredibly interconnected supply chain.
“It’s not just that surface-level car price,” said Laing. “It’s that every component into the car. And cars are an incredibly complex piece of equipment. That back and forth is cumulative. And so we see that compounding effect in the increase in auto prices in a way that really starts to feel painful when you do get that finished product.”
And with more tariffs potentially on the table, the biggest question now is how long this U.S. and Canada trade fight lasts, and how much those costs continue to build throughout the supply chain.
While tariffs could encourage manufacturers to source more materials domestically, Laing also said rebuilding that infrastructure takes years, meaning consumers and businesses could feel higher costs in the meantime.