The tariffs and a possible trade war have been averted, at least temporarily, but local experts are weighing in on the last-minute deal.
Canada and the U.S. avoided the potential trade war, as Prime Minister Justin Trudeau and U.S. President Donald Trump came to a deal Monday afternoon.
Local economists say we’re not in the clear yet as the uncertainty is creating instability with foreign investors.
“We’re just left hanging, you know, we don’t know, so we’re going to wait another month. Who knows? They’re not in negotiations. All this does is create more uncertainty for people. It’s bad for everything. You know, uncertainty is bad for the economy,” said Western Professor of Economics, Stephen Williamson.
Williamson believes the federal government did what it could – lobbying U.S. politicians, as Canadians anxiously awaited to see whether tariffs, a 25 per cent on imports and 10 per cent on energy, and countermeasures on an initial 30 billion worth of U.S. goods were to come into effect.
“If you located a business in Canada, you could depend on being able to sell your products in the U.S. and in Mexico for, you know, without trade barriers. And so now there’s no there’s no assurance of that’s bad for us,” Williamson added.
Trade has been mutually beneficial for both countries for centuries, but the threat of a tariff war means it’s perhaps time to consider looking at other potential trade partners, said Western Economist Ananth Ramanarayanan.
“I think there is an argument to be made for diversifying trade relationships, But I think the proximity of the U.S. and the long history of strong trade relationships between the U.S. and Canada is kind of inescapable,” said Ramanarayana.
After days uncertainty, still, the economists have a degree of optimism.
“We have strong institutions, and we have been through hard things before, the global financial crisis for one, and Covid,” said Williamson.
The tariffs being paused is good news for Canadians, but there is potential for long-term affects on trading relationships, something professor Williamson says would impact our standard of living permanently.
