Tariffs

You have probably heard all about tariffs via the news media. The tariffs that the United States’ President Trump recently imposed on Canadian steel and aluminum does not have too much impact on the majority of Canadians. What it does is increases the price of Canadian versions of those commodities for American manufacturers and therefore they may buy those commodities made in the USA.

Our Prime Minister,  Justin Trudeau, and his government recently brought corresponding tariffs against US manufactured products. In total, they are imposing over 13 Billion Dollars in tariff against the US made products. This is similar to what China did when they were slapped tariffs with by President Trump.

Our Canadian government has included a wide variety of product categories. They have included quite a few food-related categories besides steel and aluminum.

Though the tariffs came into effect on July 1st, 2018, they probably won’t start having an impact on people’s pocketbooks for about 2 weeks since products that are in Canada are not affected nor are products on the road heading to the border. BUT the tariff is coming, so please expect to see some price changes fairly soon.

How much will the tariff be?

The tariff being charged on this round of retaliatory tariffs is 10%. You should expect about a 10% increase in those items affected. All businesses work on a margin of some sorts. The margin is the difference between cost and what the goods or service is priced at in the marketplace. There are several layers of handlers of the flow of products and a 10% tariff may soon become a 10 – 14% increase at the check-out.

What are some of the benefits of this tariff?

Tariffs and such are used to add costs onto a product that the government deems undervalued in our economy/society. They use these kinds of mechanisms to also protect their own industries and economy. When President Trump imposed the aluminum and steel tariffs it would in effect make our Canadian manufactured metals more expensive compared to US manufactured aluminum and steel.

When something becomes more expensive we usually look around for less expensive options. This will ‘force’ people to consider Canadian produced products and put more money into the Canadian economy. All good things.

For example, ketchup is one of the categories that will be affected by the 10% tariff. Heinz is a popular producer of ketchup. They would have you believe that they are the only producer of this product. In 2013, Heinz closed its Canadian factory. This was good news for Canadian producers of ketchup like French’s (Check out the article here).

The tariff will make Heinz’s ketchup more expensive and sales of French’s will likely increase and take more of the market share from Heinz.

So yes, there are some upsides to tariffs.though they may not be reflected directly to your pocketbook.

My take on the tariff

The intention of the tariff is to send a message to members of the US Government that we too can impose tariffs on the flow of goods. Since we are the US’ largest customer we have some power. When/if we stop purchasing their products then they will start to pay attention. If we continue to consume those same products then all we are doing is paying the government a surcharge on the products. The US manufacturer doesn’t care if the price is higher in Canada what they care about is that the product is selling.

I see this as an opportunity for Canadians to discover similar products made here in Canada rather than spending money on American made products.

So – send a message! Reduce your purchases of these products:

  • Amy’s
  • Earth Island
  • Bragg’s
  • San-J
  • Pacific Foods
  • GT Kombucha
  • Brew Dr. Kombucha
  • Dandies
  • Cocomels
  • Arizona Peppers
  • any American Peanut Butter, jams, ketchup, mustard

This is an opportunity to check out some great Canadian companies.

Our store is always looking for Canadian and local suppliers of products so more of our spending is kept in our local economy. Check out the Farmer’s Markets as well.

We are a small independent store but we are working to make a positive difference in the world.

The ‘nice’ thing about a tariff like this is that it applies to small stores like ours and the Walmarts of the world.

Check out the CBC report they did on the subject today. They included our store.

 

 

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