Some Alberta businesses are struggling to plan for the future amid chaotic and escalating tariff threats from the U.S.
Tariffs on Canadian steel and aluminum are set to come into effect on Wednesday, one day after a tense exchange that almost saw those taxes doubled.
On Tuesday, U.S. President Donald Trump threatened to raise tariffs on those products to 50 per cent after Ontario announced a 25-per-cent surcharge on electricity exports to the U.S.
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While both those announcements were later walked back, the precarious situation facing local businesses remains.
“We’re anxiously waiting. It’s a lot of uncertainty for us,” said Jacob Penner, vice president of corporate development at Waiward Industrial.
“When we think of government, traditionally things move relatively slow. There’s not a whole lot of change that happens overnight,” he added. “That’s all kind of changed with the new dynamic, and we’re just trying to stay agile.”
Penner said Waiward Industrial doesn’t stand to be greatly impacted when U.S. tariffs come into effect on Wednesday, as the steel fabricator works primarily on Canadian projects.
However, should the trade war escalate or drag on, he said the company stands to lose business as other local companies are priced out of the U.S. market.
“It’s certainly going to affect the competitive landscape here in Canada,” Penner said. “Saturating the Canadian market is potentially something that we’re worried about, but we don’t quite know what that’s going to look like and how quickly it’s going to transition.”
Beyza Ural Marchand, a professor of economics at the University of Alberta, said the nature of North America’s steel industry means any tariffs are highly disruptive.
“The supply chain is such that we have both upstream and downstream industry,” she explained. “We have both mining production of steel, and steel processing plants and distribution.
“So materials that will cross the border multiple times, so it will magnify the effects of those tariffs.”
Marchand said trade declined “substantially” when Trump, during his first term, imposed a 25-per-cent tariff on steel and a 10-per-cent tariff on aluminum.
Canadian steel exports fell 38 per cent and aluminum exports averaged 19 per cent lower than before the tariffs. While those measures lasted about a year, Marchand said the current situation is difficult to analyze – meaning there’s no way to know when the newest round might be lifted.
“Industries right now cannot predict whether or not they are expecting a long-term policy,” she said. “It also delays investment decisions, delays contracts … I think incredible harm is already done. So even if there are no tariffs, we will probably see some effects of what happened in the last six weeks.”
With files from CTV News Edmonton’s Nav Sangha.
