Parker Lund and his wife Iris have been stockpiling soybeans, black beans, peanut butter, toilet paper, paper towels and tissues for the past few weeks.
Since they heard about the threat of U.S. tariffs, the retirees in their 80s say they have stored dozens of products in their basement in Halifax. And they’re not done yet – they have plans to stock up on more items soon.
Lund, an 86-year-old retired teacher, said he and his wife are worried that the trade war between the United States and Canada will increase prices for products.
“We think they really are going to go up when these tariffs go on and that’s why we’re doing it,” Lund said in a phone interview with CTVNews.ca on Feb. 27. “It (prices) will still be a shock, but at least we’ll be semi-prepared for it.”
He said he and his wife are also trying to buy Canadian – or at least non-American – products, even if they have to pay more, because they feel it’s their patriotic duty to protest U.S. President Donald Trump’s tariffs.
A North American trade war was triggered after the U.S. imposed 25 per cent across-the-board tariffs against Canada and Mexico on Tuesday. Canadian energy was hit with a 10 per cent levy.
Canada, meanwhile, is retaliating with counter-tariffs against U.S. products. In addition, Prime Minister Justin Trudeau said the federal government is in talks with provinces and territories about possible “non-tariff measures,” The Canadian Press reported Tuesday.
Despite Canadian anxiety about tariffs, there haven’t been long lines at stores and empty shelves reminiscent of the COVID-19 pandemic, and it’s unclear whether the products the Lunds bought will eventually see price hikes. Still, they and other consumers are worried about the financial hit as experts say Canadians should brace themselves for some pocketbook pain as a result of the trade war.
Bracing for ‘really rough ride’
Elizabeth Richardson, a semi-retired teacher in her 60s from Markham, Ont., says she and her friends aren’t stockpiling products, but they’re buying Canadian items whenever possible and avoiding American ones. Though Canadians should gear up for a “really rough ride” with the tariffs, she said, she’s trying not to worry about it since she has no control over the situation.
“I’m not going into a situation like we had with COVID where everybody raided all the grocery store shelves and bought all the toilet paper and paper towels and everything else,” Richardson said in a video interview with CTVNews.ca on Feb. 27.
She said she prepared for possible price hikes before Trump got elected in November, learning how to tell which products were produced or made in Canada.
Richardson said it’s easier to find Canadian products than people may think, noting she uses apps and other online resources to help her search.
“It’s all part of our reaction to the tariffs and to this punitive behaviour that Donald Trump has adopted towards Canada, trying to strong arm Canada into submission,” she said. “As somebody who’s retired and does not have a lot of money to spare, I am still going to do the little bit that I can and I’m going to support my country.”
Robert Szakonyi, a retired field service technician from Nanaimo, B.C., says he’s also refusing to buy American products and has cancelled upcoming trips to California.
“I’m going to do everything I can not to give any kind of financial support for the U.S. because of what they’re doing to us,” Szakonyi, 73, said in a video interview with CTVNews.ca on Feb. 26. “I refuse to buy anything unless absolutely necessary, and I can’t get anywhere else. ... We have to support our country.”
How will tariffs affect Canadians' pocketbooks?
Some Canadians are bracing for potential pocketbook pain, as economists expect a U.S.-Canada trade war will have a ripple effect on both countries.
As Trump launched the tariffs, Americans will be hit first with higher prices because U.S. businesses importing Canadian goods would pay the tariffs and may pass on the extra costs to consumers, economist Tu Nguyen, who works for accounting firm RSM Canada in Toronto, told CTVNews.ca in a video interview on Feb. 27.
At the same time, Canadians will feel the sting later for certain items produced through the integrated Canada-U.S. supply chain, while a lower Canadian dollar may make imports of U.S. products a bit pricier, she added.
“A lot of goods that are produced in North America, the U.S., and Canada and Mexico are not entirely produced in one country,” Nguyen said, using the example of certain car parts that are produced in the U.S. and Canada. “So even when there’s a tariff only from one side, the end result might be higher prices for all consumers.”
Some food and beverages that you find in the grocery store could be among the items affected by U.S. tariffs alone, said Samuel Roscoe, a lecturer in operations and supply chain management at the University of British Columbia Sauder School of Business in Vancouver, in a video interview with CTVNews.ca on Feb. 27.
Canada exports raw materials and resources, including wheat, pork and canola, to the U.S., Roscoe said, which American firms then use in products such as bread, baked goods, processed meats, salad dressing and canola oil before shipping them to Canada where they are sold.
Similarly, Canadians could pay more for vehicles if Trump follows through with slapping steel and aluminum tariffs on Canada, which Trump said would take effect March 12.
“The Canadian consumer is sort of at the mercy of a lot of these tariffs and tariff threats,” said Roscoe, whose expertise includes tariffs, imports and exports, and global supply chains.
“Some industries have very, very slim margins, and they have to pass on those increases to customers because if they don’t, then they will lose money and eventually go out of business.”
What could increase in price first?
Experts say it’s not clear when consumers would see price hikes or how long the tariffs would last.
Nguyen said it would take longer for consumers to see price increases for “non-perishable and durable” products such as cars and appliances since businesses will likely have inventory in stock.
With Trump’s tariffs in effect, Canada’s retaliatory tariffs are expected to raise prices for all targeted American products imported into Canada as well, Nguyen said.
The first items to see price increases will be food items such as peanut butter, fruits and vegetables, meat and dairy, which were included in the Canadian government’s list of American products that would be targeted by the retaliatory tariffs, Nguyen said.
With those products expected to cost more, she said it makes sense for Canadians to avoid buying them.
Nguyen expects the price hikes to be “a lot less” than the tariffs themselves, though she said it is hard to estimate the financial impact on consumers.
With the 10 per cent tariffs on energy imports, Nguyen said Canadians may eventually see a “slight increase” in gasoline prices since Canada exports crude oil to the U.S. and imports gasoline.
What can Canadians do?
With many Canadians worried about the tariffs, Nguyen suggests a way they can prepare for the expected financial hit.
“I think the preparation perhaps comes more from just having enough savings and strengthening the household budgets rather than stockpiling because it’s very difficult to see ahead of time which items would be directly impacted and which will be the most impacted,” she said.
Buying Canadian when feasible is also a good option, she said.
The impact of tariffs goes beyond the higher price tags and may lead to layoffs in certain industries.
“If there’s a disruption in the supply chain, it also means that there’s a disruption in the production side, which can also mean that there will be a higher unemployment because there’s less demand for products,” said Marco Bijvank, associate professor of operations and supply chain management in the Haskayne School of Business at the University of Calgary, in a video interview with CTVNews.ca on Feb. 27.
Many American firms may try to find non-Canadian suppliers to avoid getting dinged financially, so affected Canadian businesses could raise prices to make up for lost revenue from the U.S. market.
Meanwhile, Bijvank doesn’t recommend stocking up on items because he says it would disrupt the supply chain.
‘Taxing each other into poverty’
While Phil Magness, an economic historian and senior research fellow at the Independent Institute non-profit, non-partisan think tank in Oakland, Calif., understands the spirit of the “buy Canadian” movement, he expects the fallout from Trump’s tariff policy will ultimately harm both Canadian and American consumers.
“What we’re talking about here is essentially like a tax shock because the tariff is essentially slapping a new tax onto large swaths of economic production,” Magness said in a video interview with CTVNews.ca on Feb. 27.
“The reality of tariffs is that the burden falls on consumers the heaviest, and we know this from almost every tariff we’ve had in history,” he added. “American consumers are certainly right to be worried, as are Canadian consumers, because when you have a retaliatory trade war, it’s just taxing each other into poverty essentially.”
