Canada Should Do Nothing in Response to Trump's Tariffs

Canada's best response to US tariffs may be to do nothing at all, according to Trevor Tombe, a professor of economics at the University of Calgary. The tariffs imposed by the US are not just an attack on Canada's economy but also a reflection of bad American tax policy.

Tombe argues that retaliation is not justified unless there is a probability that it will procure the repeal of the high duties or prohibitions complained of. In this case, he believes that Canadian retaliation would have little impact on US policy and could even harm Canadian consumers and businesses.

The data shows that many individual Canadian products face high tariffs, but overall, Canada is not singled out by US trade policies. Tariffs are taxes on Americans, not Canadians, and the US can adopt whatever policies it likes, including ones that damage its own economy.

Tombe suggests that instead of debating how to retaliate against the US, Canada should focus on improving its own economy through policy choices such as recognizing professional credentials, improving competition, making infrastructure easier to build, reforming taxes, and reaching agreements with major economies. This would put Canada in a better position to sell goods and services beyond the US market.