A decade ago, if you told a Canadian that Canada would be in a future trade war with the United States, they would probably laugh at you. “They’re our largest trading partner and one of our closest historical allies,” they’d say. There’s no way they’d ever do something so out of left field as to declare a trade war on Canada.
Obviously, times have changed. Canada’s symbiotic relationship with the United States has now degraded into fighting over tariffs, but who will suffer the consequences of this war?
TARIFF TROUBLES
Historically speaking, Canada and the United States are very intertwined as far as countries go. Their economies work in tandem with each other, and both rely on each other’s resources to fuel their citizens’ lives. Since the U.S. President Donald Trump’s tariff declarations, the countries’ allyship has now been demoted.
It’s hard to establish exactly how these extra costs will affect the average citizen. Everyone knows it’s not a great thing, and that it will damage the economy, but how exactly will people be affected?
EDUCATED GUESSES
According to experts, deducing the ultimate effect of tariffs on the average consumer will require some level of guesswork. Although, the general consensus is that it will cost a regular, every-day American from $3,100 to $4,900 a year.
This number comes from 4 of 5 different independent groups of varying ideologies, sourced by the fact-checking website PolitiFact. The outlier group, the centre-right Tax Foundation, instead estimated $1,243.
Here are the values from the other sources:
- Yale Budget Lab: nonpartisan. Estimated an average loss of $4,900 per year. Low-earning families will suffer the most, losing 5.1% of their income.
- Center for American Progress: liberal. Estimated an average loss of $4,600 per year.
- American Action Forum: centre-right. Estimated an average loss of $3,900 per year. Although, this number was calculated through a 60% tariff on China, as opposed to the current 145%.
- Urban Institute-Brookings Institution Tax Policy Center: nonpartisan. Estimated an average loss of $3,100.
CRUNCHING THE NUMBERS
PolitiFact used these numbers to verify the U.S. Senate Minority Leader Chuck Schumer’s claim that “American families would have to pay about $4,000 more a year.” As of now, there are no reported numbers for Canadian consumers. We only know that prices will certainly be higher.
Although complicated and partially fuelled by guesswork, Politifact named this claim “Mostly True.” Whether or not these numbers will come to pass, it’s safe to assume that many groups see this trade war as costly.
