An economics professor at the University of Lethbridge says the ongoing trade war between Canada and the U.S. is a dangerous political contest.
Associate Professor Danny Le Roy says President Donald Trump’s 25 per cent tariff on all Canadian goods that went into place at 12:01 a.m. Tuesday has people rightfully angry. However, he explains it is important to focus on how that anger is channelled.
“Ultimately, it’s a choice and now is not the time to be rash, it’s not a time to be reactionary and emotional. The time is to think and choose an appropriate response that doesn’t do further damage to individuals in this country,” Le Roy says.
He explains the U.S. tariffs are counter-productive to accumulating wealth, because “you can’t tax your way to prosperity”. He believes the worst response the Canadian government could have is to tax Canadians through counter-tarriffs because penalizing those who want to buy goods from the United States will only magnify the problem. Adding the money that comes from Canada’s retaliatory tariffs is “[legally] appropriating wealth from people in Canada”.
“What is the logic behind penalizing Canadians? How does that resolve the problem? How does collecting an additional $155 billion in taxes from Canadians lead to a greater level of prosperity? How does it lead to Americans changing their mind or the president changing his mind on import taxes?”
Le Roy anticipates that people have been preparing for the possibility of these tariffs for over a month. Even with preparations though, there is little an individual can do or the country’s politicians can do outside of regularly making the case “that import taxes are not a way of creating prosperity” and retaliating will only cause self-inflicted damages.
On Tuesday, Prime Minister Justin Trudeau announced Canada’s own retaliatory tariffs, imposing an initial $30 billion in duties on U.S. goods, with a threat to add $125 billion in April.
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