Tensions between U.S. President Donald Trump and Canadian Prime Minister Justin Trudeau are on the rise, and it could (slightly) deflate your dollar power.
On May 31, Trump announced that he was invoking a 25% tariff on Canadian steel imports and a 10% tariff on Canadian aluminum imports, effective June 1. The reasons for the tariffs, Trump said, are issues of “national security” and Canada’s “unfair” treatment of our neighbours south of the border. (And when Trudeau prodded him about what those concerns were exactly, Trump reportedly said: “Didn’t you guys burn down the White House?”)
Trudeau was uncharacteristically blunt in his response, calling Trump’s comments insulting and foolish. “We have to believe that at some point common sense will prevail, but we see no sign of that with this action today by the U.S. administration,” the PM said in a press conference. Shortly after this, Canada’s Foreign Minister Chrystia Freeland announced the Canadian government’s plan to invoke a list of retaliatory tariffs on American goods equal to approximately $16.6 billion, which will come into effect on July 1. In addition to steel and aluminum, the list includes common household goods such as mayonnaise, chocolate, yogurt, maple syrup (LOL we good) and whisky.
Experts say that the total effect of these tariffs on the Canadian economy is “minimal,” but what about the effect it will have on the wallets of the average Canadian millennial? We spoke to economist and University of Toronto professor Nicholas Li to break down just how much millennials might feel these changes.
If you work in the auto industry, your job could get hit
According to the Peterson Institute for International Economics, Trump’s steel and aluminum import tariffs could impact the Canadian economy by a whopping $3.2 billion. It also means that that cities that are heavily reliant on the steel and auto industries—such as Hamilton, Ont. and Oshawa, Ont.—could be hit with job cuts. “The estimates I’ve seen of effects on Canadian jobs for these steel and aluminum tariffs are around 6,000,” Li says, “which is a lot, but it’s actually quite a small number relative to the total Canadian economy.” Still, with the job market as tough as it already is for millennials, this is bad news.
You may need to switch to vodka
Speaking of bad news, things aren’t looking good for whisky enthusiasts. Specifically, bourbon—a.k.a. American whisky—could see a significant price increase due to the retaliatory tariffs. “I wouldn’t be surprised if the price of whisky goes up 5 to 10 percent” Li says.
Pampering yourself may get more costly
As “manicure and pedicure preparations” are on the PM’s list of retaliatory tariffs, American-made nail polish, nail brushes and hand soap will rise in price, which means the cost of your bi-weekly self-care sesh just got more expensive. Want to switch to Canadian-made products instead? According to Li, that may not *actually* save you any coin. “You can switch to the Canadian alternatives but, of course, everyone might do that, which will actually bid up the price,” he says. Oh, and stock up on cult-fave Elnett now, because hair spray is also on the list.
Your grocery bill may increase, too
According to Karl Littler, vice-president of public affairs at the Retail Council of Canada, Canadians could see the biggest price difference on their grocery bills. He told the Toronto Star that certain affected food items could see a 4–5% increase in price, an estimate that Li agrees with. “The grocery space is pretty competitive, so those companies are only maybe making 5%, 6%, 7% actual profit,” he says, explaining that the grocery chains have little financial wiggle-room. “Those relatively small margins mean that a lot of the increase in costs have to be passed onto the consumers.” Food items such as toffee, chocolate, pizza and strawberry jam are all set to be affected, so maybe now is a good time to finally do that sugar detox?
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