BBC Stocks
A Democratic blue wave in the United States midterm elections hasn’t changed the immediate economic struggles facing Canadians businesses as they navigate the most recent tariffs, although the results may send a message about affordability, say sector reps. “The tariffs are having a real impact on Canadian manufacturers, and the longer they remain in place, the greater the risk to jobs, investment, and our competitiveness,” said Greg Moffatt, president and CEO of the Chemistry Industry Association of Canada (CIAC). “The political dynamics in Washington and the U.S. have changed, but the economic realities haven’t.” SPONSORED CONTENT The American Democratic Party secured control of both the House of Representatives and the Senate following a dramatic victory in the Nov. 3 U.S. midterm elections.
This quickly led to Maryland Representative Jamie Raskin, the ranking Democrat on the House Judiciary Committee, to state on Nov. 4 that having free and fair trade with Canada would be “very much on our agenda,” adding that he hopes to see movement on the Canada trade file “within the first 100 days” of Democrats taking power in the new year, as CBC News reported on Nov. 4. Moffatt told The Hill Times that the immediate challenge for his industry hasn’t changed, with 14 plastic product classifications currently subject to 50-per-cent tariffs. Effective Oct. 30, the U.S. modified its 50-per-cent Sec. 338 tariffs on Canadian goods by removing 22 products, while adding 100 new ones.
Greg Moffatt, president and CEO of the Chemistry Industry Association of Canada, says ‘we’re looking for progress on the tariffs that are currently in place now, and I don’t think anybody can assume that the [U.S. midterm] election results ... are going to deliver it.’ Photograph courtesy of Greg Moffatt “We are looking for progress on the tariffs that are currently in place now, and I don’t think anybody can assume that the election results ... are going to deliver it,” said Moffatt. “Canada’s shown a willingness to return to the table with the U.S., and we think that’s extremely positive, and we’re supportive of the government of Canada continuing to do that and finding a resolution to what we’re experiencing right now.” Canada-U.S. Trade Minister Dominic LeBlanc (Beauséjour, N.B.) noted that trade talks are conducted with U.S.
President Donald Trump and his cabinet, and “those are the people with whom we’ll be having those conversations,” in the same CBC News report. The CIAC said it supports Ottawa’s “timely and targeted” response to support domestic businesses during the trade war, but argued these measures would have “limited effect” without “a trade response that addresses the underlying imbalance facing Canadian manufacturers and restores competitive conditions,” according to a Nov. 4 email CIAC sent to Grant McLaughlin, Procedural Clerk at House of Commons, and shared with The Hill Times . Of the 14 domestic plastic products currently subject to American tariffs, nine of those classifications are not covered by a counter tariff from Canada, including self-adhesive plastic sheets, plastic carboys, bottles and flasks, according to the CIAC email.
The nine fully uncovered plastic classifications represent about $1.83-billion in Canadian exports to the U.S., and about $2.3-billion in imports from the U.S. according to CIAC data. The organization also identified two packaging product classes that face 50-per-cent U.S. duties without reciprocal tariffs by Canada, and two lubricant classifications that are not covered. CIAC is urging Ottawa to close these gaps by applying an interim 25-per-cent surtax to the nine uncovered finished plastic product classes, and also to “assess a calibrated response” for the two remaining packaging classes and two lubricant classes.
Derek Nighbor, president and CEO of the Forest Products Association of Canada (FPAC), told The Hill Times that the U.S. midterm results don’t change his group’s advocacy with Canada’s federal government, although they may send a message on the American side. According to the AP Voter Poll published on Nov. 5 —a survey of more than 100,000 voters in all 50 U.S. states—about two-thirds of midterm voters stated that Trump’s own economic policies had fuelled inflation. Derek Nighbor, president and CEO of the Forest Products Association of Canada, says, ‘I think the message out of the U.S. ... was about affordability and a want for greater certainty.’ Photograph courtesy of the FPAC “I think the big takeaway for us is that the Canadian forest sector can be a solutions-provider in addressing the affordability crisis in the U.S.,” said Nighbor.
“I think the message out of the U.S. ... was about affordability and a want for greater certainty. I think Canada and the Canadian forest sector can be a key partner in helping the U.S. deliver on that.” The revised list of the Canadian products subject to 50-per-cent tariffs by the U.S. under Sec. 338 of the Tariff Act of 1930 from late October removed items such as plywood sheets, boxes and crates used for packing of goods, and refrigerating or freezing equipment, but the new products added—which, therefore, now facing 50 per cent tariffs—include cocoa powder and cocoa products, paints and varnishes, soaps, shampoos, and select wood and paper products. Nighbor told The Hill Times that the changes resulted in 13 wood and paper products being removed, representing around $600-million in annual shipments categories.
However, the 17 new wood and paper categories added represent about $650-million in annual shipping, he said. “Some winners, some losers in the industry ... in terms of which businesses benefited, and new businesses that were hit. But overall, just more uncertainty and frustration for the sector,” said Nighbor.
“The main thing is ... this on again, off again game, regardless of category, is just not good for business. It just creates a lot of uncertainty. It disrupts customer relationships, and it just challenges the ability to plan.” When asked about current advocacy messaging to Ottawa, Nighbor said the conversations continue as the trade talks resume.
“The door continues to be open with the federal government, and that’s a two-way street in terms of staying close on developments and whatever information we can provide to support the ongoing negotiation,” he said. Get Today’s Headlines Newsletter Your quick scan of the news you need each weekday to be the smartest person in the room. By entering your email address you consent to receive email from The Hill Times containing news, analysis, updates and offers.
You may unsubscribe at any time. See our privacy policy “[For] the other piece, the focus is on controlling the controllable and what are those measures the federal government can undertake to help improve business prospects and certainty for our sector.” Alex Greco, the senior director of manufacturing and value chains with the Canadian Chamber of Commerce, told The Hill Times in a Nov. 4 emailed statement that the “constant flux state” of U.S. tariffs on Canadian products creates added layers of uncertainty for businesses already navigating a prolonged trade war. “Canada’s priority must remain economic security through increased trade options abroad, while strengthening our economy here at home.
That means working toward a durable resolution with the United States, reducing regulatory barriers, improving tax competitiveness and making it easier for businesses to reach new markets,” said Greco. Greco added that prolonged trade tensions cannot be allowed to “diminish the urgency of the challenges businesses are facing.” “For many companies, these are not abstract policy debates. They are decisions about making payroll, maintaining jobs, investing in new equipment and whether to expand operations in Canada.
When the stakes are this high, businesses need their concerns heard by governments more than ever. Our role is to keep bringing forward practical recommendations and ensuring decision makers understand the consequences these policies are having on Canadian businesses, workers and communities,” said Greco in the email. jcnockaert@hilltimes.com The Hill Times Jesse Cnockaert began writing for The Hill Times in 2021 following three years as editor of The Lobby Monitor. He still covers federal lobbying, follows key legislation in the House and Senate, and takes the lead on our policy briefings.
Cnockaert previously reported for Metro Ottawa , and spent eight years covering news for three different municipal newspapers. He can be reached at jcnockaert@hilltimes.com. See all stories BY JESSE CNOCKAERT
Source: The Hill Times
