Canada should stop imposing tariffs. It makes us look weak, seriously.
I know this may be old news to some, but for those who missed it, the federal government increased tariffs on aluminum and steel by 25 per cent, and 100 per cent tariff to Chinese EVs back in August.
They imposed the tariffs to “protect Canadian workers and key economic sectors from unfair Chinese trade practices.”
But in October, the feds announced a tariff remission process for businesses importing select Chinese products.
Yes. Just a month after they imposed the tariffs, the government took a step back, offering exemptions for companies that can prove they cannot find alternative suppliers or are locked in contracts.
It makes you wonder what the government even expected was going to happen. For businesses to just snap their fingers and summon new suppliers overnight? Many domestic businesses buy materials or components that - like it or not - come from China.
Why? Because there is not enough domestic production to meet demand - and that's why you trade.
As an example - if a Canadian store buys potatoes from China because they’re cheaper, a 100 per cent tariff will double that price, forcing the store to purchase Canadian potatoes.
Theoretically, this means fewer sales for Chinese producers. But apparently, this is not the case for aluminum, steel, and EVs.
I’m not saying the feds should not have introduced remissions, they had to. But it speaks to a lack of preparation.
True tariffs should have no exemptions or remission processes at all. Whatever the reason for a tariff may be – and how noble it may be – it is always an act of hostility. Tariffs are meant to prove a point and demonstrate that a country is ready to hurt someone to prove that point.
Introducing a remission undermines the point of the tariffs. And imposing tariffs means you're risking a trade war. You cannot expect someone to do nothing when you sanction them.
In a trade war, there’s bound to be job losses, as multiple entities try to hurt each other’s economies.
So, how do you win? You win by preparation. In this case, by first increasing your domestic production. You don’t need a PhD to realize it’s a matter of supply and demand.
Like Sun Tzu said, “Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.”
I’m not saying Canada is weak – quite the opposite because Canada is among the top 10 largest economy, and many nations rely on Canada for trade. It’s just that the government seems hell-bent on making this proud and great nation look pathetic to the world.
