Amidst the ongoing trade tensions between Canada and the United States, various experts predict that the trade war will lead to increased costs for consumers and businesses across different sectors. Last year, Canada exported over $4 billion US worth of electronics equipment to the U.S., a significant portion of which is now subjected to the new 50 per cent tariffs imposed by U.S. President Donald Trump.
Prime Minister Mark Carney announced that Canada will retaliate against the U.S. tariffs with equivalent measures. The impact of these escalating trade disputes is expected to result in higher prices, affecting businesses on both sides of the border.
Carol McGlogan, the president and CEO of Electro-Federation Canada, expressed concerns about the devastating effects of the 50 per cent tariffs. She highlighted that 90 per cent of the exports from the industry group go to the U.S., emphasizing that these price hikes will have a broad impact on various sectors including homes, schools, and buildings.
Evan Light, an associate professor at the University of Toronto, noted that items like gaming consoles and cell phones have already been experiencing price increases due to chip shortages and supply chain challenges. With the recent escalation in the trade war, these products are expected to become even more expensive.
Andrew Bell, the Chief Product Officer at Ottawa-based Kinaxis, mentioned that the tariffs will not only affect supply chains but will ultimately impact consumers by raising the prices of products. He highlighted the ripple effect of increased costs throughout the supply chain.
Recent reports from Bloomberg News indicated that Nvidia, a leading technology company, is informing customers about potential price hikes of up to 15 per cent for its artificial intelligence chips. This escalation in prices due to supply chain challenges may hinder the adoption and deployment of AI technologies.
University of Toronto professor Light raised concerns about the potential slowdown in AI adoption as a result of increased costs. He pointed out that the rising expenses in both the U.S. and Canada could prompt a reevaluation of investments in AI technologies.