With summer now underway, worry continues to grow that we may be in the beginning stages of a major trade war between the United States and most of its trading partners including Canada.
The imposition of steel and aluminum tariffs by the Trump administration earlier this spring, based on the President’s “national security” authority, has now seen the imposition of retaliatory counter-measures by affected jurisdictions on the equivalent value of U.S. steel, aluminum and various manufactured goods. For our industry in Canada, this has meant the imposition of a 10% “surtax” effective July 1st on four categories of personal care products imported from the U.S.: manicure/pedicure preparations, hair lacquers, shaving preparations, and facial cleansers/body washes.
U.S. industry, represented by the Personal Care Products Council (PCPC) and many of our member companies, has undertaken a lobby effort with the U.S. administration and Congress to make the point that tariffs and trade wars would significantly undermine our highly integrated supply, manufacturing and distribution channels. PCPC’s statement can be found here. The U.S. Chamber of Commerce is also actively opposing tthe tariff and trade policies of the U.S. administration as seen here.
A telling moment will arrive later this July when the U.S. Commerce Department completes its assessment of whether there is a “national security” issue with the U.S. automobile industry that would provide “justification” for the imposition of tariffs on imported autos and auto parts. If the Trump administration chooses to impose such a tariff, which is anticipated to be in the 20-25% range, retaliation can be expected. Given the highly integrated auto industry in North America, and its significance to the economy, such an action and re-action can be expected to set off the “trade war” that industry has feared. Depending on what counter-measures are required to reach “equivalent value”, tariffs on U.S. manufactured products imported into Canada could be expanded to include many consumers products including more in our sector.
Your CA team will endeavor to keep you informed of developments as well as continue our efforts along with our international colleagues on this important file. Stay tuned…
