One of Canada’s top economists says Canada is caught in the crossfire of a U.S.-China trade dispute.
The United States announced Tuesday, they were considering 10 per cent tariffs on a long list of Chinese goods totalling $200-billion, including fish and apples.
And now China is ready to slap tariffs on American goods like French doors.
Benjamin Tal, Deputy Chief Economist for CIBC, said he can’t see any scenario where Canada is winning.
“Yes, there are some pockets that will be benefitting from increased demand from China, but overall it is a negative for Canada, period,” he said.
“We will be losing market share. If the Americans cannot export to China, they will look for markets in Canada — Europeans will look at the other markets, and all of a sudden Canada will be damaged.”
Americans won’t officially announce whether these tariffs will go ahead until after August 31, but some industries are already feeling the pinch.
Canadian soybean farmers are feeling the pain from already imposed Chinese tariffs on American goods.
The price has plummeted because Canadian prices are set based on American ones.
“The trade dispute between China and the U.S. is a big deal, and to the extent that it goes to a full scale war that potentially is recessionary basically for the global economy so we have to be careful here,” Tal said.
He said Donald Trump has a challenge ahead.
“If you are Trump, you basically want to go after China only after you make sure that NAFTA is a go. So, now he’s fighting two wars and that’s a bit complicated,” Tal said.