Economic experts predict that the ongoing trade tensions between Canada and the United States will result in increased costs for consumers and businesses across various sectors such as electronics, gaming, and artificial intelligence infrastructure.
Last year, Canada exported over $4 billion US worth of electronics equipment to the U.S., which is now subject to the new 50 per cent tariffs imposed by U.S. President Donald Trump on a wide range of goods. Notably, specific electrical boards and controllers top the list of exports affected by the new U.S. tariffs.
In response, Prime Minister Mark Carney announced that Canada would mirror the U.S. tariffs dollar for dollar.
Industry insiders warn that higher prices are inevitable as the trade dispute intensifies, posing risks to businesses on both sides of the border.
Carol McGlogan, the president and CEO of Electro-Federation Canada, a group representing over 230 companies in Canada’s electrical and automation sector, expressed concern about the devastating impact of the 50 per cent tariffs. She highlighted that 90 per cent of her members’ exports are destined for the U.S.
McGlogan emphasized, “Increases in pricing will drive up costs for various infrastructures like homes, schools, and buildings.” She added, “The need to expand the electricity grid by 2050 is critical, and with tariffs affecting both countries, the overall cost burden will fall on taxpayers.”
Evan Light, an associate professor at the University of Toronto, noted that items like gaming consoles and cell phones have already been experiencing price hikes due to chip shortages and supply chain challenges. He anticipates that the escalating Canada-U.S. trade tensions will further inflate prices of these products.
Traffic to Canadian e-commerce marketplace Common Goods has surged 300 per cent since Canada-U.S. trade talks broke down, according to owner Valerie Crisp. She says the response shows continued interest in buying Canadian, even as consumers navigate the complexities of the new tariffs.
Light expressed concerns, stating, “In the short term, the situation looks bleak for everyone. We anticipate significant cost transfers.” He added, “Consumers will likely face higher prices for the devices they purchase.”
Andrew Bell, Chief Product Officer at Ottawa-based Kinaxis, highlighted the impact on supply chain management software. He mentioned that many clients are utilizing their programs to assess new suppliers in light of the tariffs.
Bell emphasized, “Although the tariffs may initially affect supply chains, the ultimate cost burden falls on the end consumer.” He explained that disruptions like tariffs lead to increased component costs, as observed with companies such as Nvidia.
Will tariffs slow AI adoption?
Bloomberg News recently reported that Nvidia, a prominent technology company, has alerted its customers to expect up to a 15 per cent price increase for its artificial intelligence chips.
Bell raised concerns about