A group representing Canadian retailers has flagged orange juice, lawn mowers and whiskey on its list of U.S. goods with limited 鈥渁cceptable substitutes鈥� under the new import tariffs Ottawa plans to levy against its neighbour this summer. But the risk of a citrus beverage shortage, or steep price hikes on U.S. mowers, may not be a huge concern.
Over $16 billion in retaliatory tariffs on Canadian imports of steel, aluminum, and other products from the U.S. are set to take effect on Canada Day as part of Canada鈥檚 latest salvo in an escalating trade spat with the U.S.
The Retail Council of Canada is keenly monitoring the impact of the .
鈥淭here are certain types of products where we are struggling to see the immediate sustainability. One of those obviously is orange juice,鈥� Karl Littler, the council鈥檚 vice president of public affairs, told CTVNews.ca on Friday. 鈥淵ou鈥檙e not going to get that from a Canadian source of supply.鈥�
The products on Canada鈥檚 list are mainly ones the government believes can be substituted from other sources, whether from within Canada or from foreign suppliers. Listed retail goods and grocery items will, as of July 1, be subject to a 10 per cent import tariff.
鈥淚 certainly wouldn鈥檛 expect a giant spike,鈥� Littler said of retail prices. 鈥淭he very worst case would be a 10 per cent consequence. Because of the fact that it is on the wholesale price, you can typically expect that it will be somewhat less than 10 per cent (at retail).鈥�
He notes that it鈥檚 important to remember that the wholesale price of goods is one of several factors that determine prices at the retail level, and suggests U.S. sellers may even be willing to lower their prices if demand in Canada starts to wane in a meaningful way.
POLITICAL PUNCH
Littler said Ottawa鈥檚 tariffs were crafted with the U.S. congressional mid-term races in mind in order to 鈥渉it them where it hurts,鈥� them being the Trump administration. Consumers who demand U.S.-made products from those regions will be most acutely aware of Canadian tariffs at the checkout counter.
鈥淔lorida OJ, Kentucky and Tennessee whiskies, Michigan, Pennsylvania, Indiana and Ohio steel. Pennsylvania chocolate (and) Ohio lawnmowers,鈥� he said, listing political battleground states, and ones economically tied to specific industries.
TIME TO STOCK UP?
Littler said a lot with respect to retail prices will depend on how long Canada鈥檚 tariffs remain in place.
鈥淚鈥檓 hesitant to tell people how much Jack Daniel's to buy,鈥� he said. 鈥淥bviously, right now, there is no impact on the stock on the shelf. If this drags on, and the supplies are depleted, and the imports prior to July 1 are depleted, then you are going to see a price impact inevitably.鈥�
ADVICE FOR OTTAWA
Littler said Ottawa has no choice but to return fire against the latest U.S. sanctions on Canadian aluminum and steel. However, he hopes officials will be sensitive to the cost Canadians pay for uniquely American goods.
鈥淲e want them to fight in the Canadian corner with respect to the overall trade spat,鈥� he said. 鈥淏ut we also want them to show flexibility where substitutes are not available at any reasonable cost.鈥�
