Experts predict that the ongoing trade dispute between Canada and the United States will lead to increased costs for consumers and businesses across various sectors like cellphones, gaming consoles, and artificial intelligence infrastructure.
Last year, Canada exported over $4 billion US worth of electronics equipment to the U.S., which is now facing new 50 per cent tariffs imposed by U.S. President Donald Trump on a wide range of goods. Among the exports, certain electrical boards and controllers are the most impacted by the new U.S. levies.
Responding to the situation, Prime Minister Mark Carney announced that Canada would match the tariffs set by the Trump administration on a dollar-for-dollar basis.
Industry experts warn that the escalating trade tensions are likely to result in higher prices, posing risks to businesses on both sides of the border.
Carol McGlogan, the president and CEO of Electro-Federation Canada, which represents over 230 companies in Canada’s electrical and automation sector, expressed concerns about the devastating impact of the 50 per cent tariffs. McGlogan highlighted that 90 per cent of the exports from Electro-Federation Canada go to the U.S.
“The price increases will affect the costs of various constructions like homes, schools, and buildings,” McGlogan stated, emphasizing the potential burden on taxpayers in the long run.
Evan Light, an associate professor at the University of Toronto, noted that the prices of items such as gaming consoles and cell phones have been rising due to chip shortages and supply chain challenges even before the recent escalation of the Canada-U.S. trade war. He anticipates that these products will become even more expensive as a result of the current trade tensions.
Traffic to Canadian e-commerce marketplace Common Goods has surged 300 per cent since Canada-U.S. trade talks broke down, according to owner Valerie Crisp. She says the response shows continued interest in buying Canadian, even as consumers navigate the complexities of the new tariffs.
“In the short term, I think it’s going to be pretty terrible for everybody,” Light commented on the potential impact of the trade war. “I believe we will witness a transfer of costs to consumers through increased prices of goods.”
Andrew Bell, the chief product officer at Ottawa-based Kinaxis, a software company specializing in supply chain management, mentioned that many clients are already exploring new suppliers using the company’s programs due to the tariffs. Bell emphasized that while tariffs may first affect supply chains, the ultimate burden falls on consumers who purchase the end products.
Will tariffs slow AI adoption?
Bloomberg News recently reported that Nvidia, a leading company in artificial intelligence technology, has informed customers of potential price increases up to 15 per cent for its AI chips.
“Supply chain challenges, whether through tariffs or other disruptions, can lead to increased costs for components,” Bell explained. “This is evident