Dominic LeBlanc says U.S. President Donald Trump is destroying trade agreements following new auto tariffs on Canada.
Leblanc, the minister of international trade and New Brunswick MP, said that “what Mr. Trump is doing he’s basically vandalizing the economic arrangement between Canada and the United States.”
Canada was hit with a new 25 per cent auto tariff on assembled vehicles while previous levies of the same amount on aluminum and steel still stand.
Trump announced 10 per cent tariffs on dozens of countries on Wednesday as well as a higher fee on China, the European Union and Vietnam.
David Campbell, an economic consultant based Moncton, believes that Canada has “certainly dodged a bullet” compared to other countries facing steeper tariffs.
“These are still very, very large multi-billion dollar tariffs that are going to have impacts across the country, but it’s certainly a fraction of what the concern was,” said Campbell.
Canada has struck back at the U.S. with “dollar-for-dollar” auto tariffs that “will go into effect this weekend,” according to LeBlanc.
He believes that “all of this is absolutely counterproductive to building a growing economy.”
International Trade and Intergovernmental Affairs Minister Dominic LeBlanc, who continues to be at the centre of the trade negotiations between Canada and the U.S., says there are long-term concerns about ‘the reliability of our most important trading partner.’
This follows dollar-for-dollar counter tariffs against U.S. aluminum and steel that are already in place.
The money received from the counter tariffs will be used to support Canadian businesses and workers in impacted industries, said LeBlanc.
He said that counter tariffs are intended to cause economic hardship in the U.S. in hope that they lift their tariffs.
“At the end of the day, one of the things we think will be most important is for the Americans to see the economic damage they’re doing to themselves.”
The U.S. stock markets reacted to the trade war on Thursday experiencing a COVID-19 like crash.
“If you look at the stock markets, I would think President Trump, Secretary Howard Lutnick, these people know the American stock markets very well. It hasn’t been a good week in the United States economy,” said LeBlanc.
Tariffs from the U.S. have been previously delayed and Campbell said that now Trump will be evaluating negotiations moving forward.
“Maybe the logic there is instead of putting the tariffs on right now, wait to see how those negotiations come out and then decide what you’re going to do after that,” said Campbell.
LeBlanc has been at the centre of trade negotiations and listened to Prime Minister Mark Carney’s most recent phone call with President Trump. He said that Carney and Trump both agreed that whoever wins Canada’s April 28 election would need to “sit down with Mr. Trump.”
“We have long-term concerns about the, of course, reliability of our most important trading partner. That’s why we think it’s much more productive to have a discussion,” said LeBlanc.
Impact on New Brunswick
Campbell said that New Brunswick will feel a direct and an indirect impact from Trump’s most recent tariffs.
Just over 90 per cent of New Brunswick’s exports head south of the border but the province won’t feel auto tariffs like Ontario will.
New Brunswick still has its own companies in the auto industry, such as Malley Industries, that produces ambulances in Dieppe.
“We have ambulance manufacturers and other suppliers. So, it’s certainly just a fraction of what you would see in Ontario, but we do have some of that,” said Campbell.
Indirectly, Ontario is the largest economy in Canada and according to Campbell, any economic downturn there will send a “ripple” across the country.
He said that New Brunswick can expect a number of economic impacts, including inflation.
Long-term threats
LeBlanc said that in the long term there are five sectors that Trump intends to leave tariffs on.
“The president is going to try and restore or build up domestic capacity in the United States in five sectors by putting tariffs on global trading partners in steel and aluminum, automobiles, pharmaceuticals, lumber and semiconductor chips,” said LeBlanc.
He said that he worries about the forestry industry the most.
Campbell said that Canadian businesses “are going to be forced to invest in the U.S.” by building production facilities in the country to avoid tariffs.
Both Campbell and LeBlanc agree that Canada needs to diversify itself to minimize its reliance on the U.S.
“We desperately have to get Canadian businesses in a position where we can diversify our markets,” said LeBlanc.
Campbell said Canada should be promoting more inter-provincial trade and look at developing new international markets.
“We’ve got to diversify away from the U.S.”
