The multi-billion-dollar Great Lakes shipping industry is bracing for the impact of a potential 25% tariff on Canadian imported goods, as recently promised by President-elect Donald Trump.
Trump cited concerns over illegal immigration and fentanyl trafficking over the border as the motivation for the tariffs. He’s promised several times on the campaign trail to implement tariffs on imports to other countries. Mexico is also included in Trump’s 25% tariff promise.
The Great Lakes-St. Lawrence Seaway generated over $50 billion in economic activity last year. Over 350,000 people work on the lakes in the shipping industry. The shipping companies are raising alarm about what a 25% tariff would do.
Bruce Burrows is the CEO of the Chamber of Marine Commerce, a group representing Canadian and American shipping stakeholders.
He said the 25% tariffs would hurt agriculture companies he represents on both sides of the border.
"They manufacture products that they sell to the American consumer. And if their input costs go up by 25%, then that's going to be passed on very quickly to the U.S. consumer,” he said. “This is not good."
Burrows said that several noteworthy Canadian components are used in American industries, and that tariffs would cause price shocks.
“Steel, oil, cement, aluminum, stone and other aggregate, salt, which is, used for safety purposes on people's roads,” he said naming examples.
“Products like steel and aluminum, it’s feeding the car assembly system and manufacturing system in the U.S. Some of these products go back and forth across the border numerous times before they're finally put into the finished vehicle.”
Canadian politicians have echoed concerns over the tariff plan. Ontario premier Doug Ford said in a social media post that the plan “would be devastating to workers and jobs in both Canada and the U.S.”
On Monday, Trump and Canadian Prime Minister Justin Trudeau discussed the tariffs over the phone.
Burrows called for Canada to work diligently on the issues Trump mentioned.
“I think it's important for our government to, to get to the bottom and have a really good frank conversation with Mr. Trump and, come up to a mutually agreeable solution here and try not to sideswipe the economy,” Burrows said.
As for what those conversations might look like Alan Deardorff, an international economics professor at the University of Michigan, said they’ll likely be focused on tightening the border.
“I don't think they necessarily have to clamp down instantly, and so that we observe zero migration or zero fentanyl crossing the border,” he said, referring to Canada and Mexico.
“Just persuade him, that they will take action sufficiently. He is subject to that, I mean, he likes to make deals. So, if he can point to a deal, he'll be happy with that,” Deardorff added.
The economist also said retaliatory tariffs, of the sort Mexico’s President Claudia Sheinbaum is mulling over, likely wouldn’t hurt America much.
“The U.S. import so much more from Mexico than they import from us,” he said. “A tariff by them, I don't think, would stop Trump and it would mainly just hurt them. I think it hurt us a little bit but, but I don't think it would at all be effective.”
