By announcing customs tariffs of 25% on all products coming from Canada, Donald Trump has already hurt certain Quebec businesses and opens the door to significant repercussions on the province’s economy, believes the president. general director of the Federation of Chambers of Commerce of Quebec, Véronique Proulx.
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She explained that the impacts of this threat would first be felt on investment.
“Companies which have one foot on each side of the border, that is to say which have factories in Quebec, for example, and in the United States, if the tariffs were to apply, necessarily, they will choose to invest on the American side, in their American factories, because they will want to maintain their access to the market. We must not forget that Quebec, Canada, is a very small market,” indicated Mr.me Proulx.
On the other hand, with 75% of Quebec exports going to the American market, the province’s economy would suffer.
“We are talking about companies in the aerospace sector, in the oil sector, aluminum, these are the main export sectors. But we also have to think about our SMEs in doors and windows which are on the south shore of Montreal or in Beauce, for example. These companies, when they want to export from Quebec, they will no longer be competitive with 25% tariffs,” underlines Véronique Proulx.
And even with lower prices, for example of around 10%, the impacts would be major.
“At 10%, we have certain companies that are perhaps capable of absorbing it, we have other companies that will invest to increase their productivity, their competitiveness so that when they arrive in the United States, the price is attractive . But in industries where demand and supply are equivalent between what we export and the needs of Americans, we will necessarily lose in the exchange,” proclaims M.me Proulx.
“It’s clear that it will have a direct effect on our GDP,” she adds.
And the impacts are already being felt in Quebec. Several chambers of commerce have already contacted their federation to express their concerns.
“It generates a lot of worry, and worry is bad for investment. We know that businesses want predictability. And there, there is a lot of unpredictability,” explains Mme Proulx.
What should Canada do?
The CEO of the Federation of Quebec Chambers of Commerce does not look favorably on Conservative Leader Pierre Poilievre’s idea of responding with customs tariffs on products from the United States.
“What we want to avoid at all costs is a price war,” she says.
During Donald Trump’s first term, he imposed tariffs of 10% on aluminum and 25% on steel from Canada. Canada responded with import tariffs.
“Our small, medium-sized Quebec businesses that sourced steel and aluminum from the United States had to pay tariffs. So they were the big losers. Then ultimately, it is always the consumer who pays the bill,” mentions Véronique Proulx.
To see the full interview, watch the video above.
