U.S. tariffs on Canada: (Almost) nobody wants this, except the guy who really does
Jason Markusoff | CBC News | Posted: January 31, 2025 12:00 PM | Last Updated: January 31
Business leaders, experts, even other Republicans dislike the import taxes Trump threatens
This may give some solace to Canadians dreading the impact of large across-the-board U.S. tariffs: you're not alone in your sentiment.
The idea remains deeply unpopular among residents of the country whose new president is threatening to erect the economically harsh trade barriers. Polls by Leger and the Associated Press/NORC in January both found that only 29 per cent of Americans want tariffs on all imports.
That includes not just a significant (though non-majority) chunk of supporters of Donald Trump's own Republican Party, but also many of its key figures.
Avowed libertarian Senator Rand Paul and more traditional establishment Republican Mitch McConnell don't always see eye to eye, but both Kentucky senators have warned that Trump's broad-based tariff idea is a bad one that will cause prices to rise for American consumers.
Big business may cheer on deregulation and much of what Trump pitches, but opposes tariffs, with the U.S. Chamber of Commerce warning last year his 25 per cent rates on all Mexico and Canadian imports would ding the typical family more than $1,000, "with significant harm to U.S. manufacturers, farmers and ranchers."
The retail sector is also worried about the tariff-on-everything approach.
And if you imagine the U.S. oil industry is buoyed by Trump's claims that "we don't need their oil and gas," then you'd be misunderstanding how integrated Canadian producers and U.S. refineries are — and a top petroleum lobby's president reportedly wants its neighbours' oil exports shielded from Trump's trade actions.
WATCH | CBC breaks down what the U.S. president really wants from Canada:
It's not different from the widespread condemnation from business groups and Republican politicians alike when Trump imposed tariffs on Canadian aluminum and steel in 2018 in his last presidential term, when they were branded a "tax hike on Americans."
In 2025, with more of the conservative movement remade in Trump's image than in his first presidency, it remains hard to find voices south of the border who view Trump's tariffs as a great idea. The key exception, of course, is the decision-maker himself, who's repeatedly boasted they will "make our country rich."
It's hard to find any experts who will back him up on that. Not even from the conservative realm of think-tanks: including the Cato Institute, the American Enterprise Institute — "Anyone willing to tell the president his tariff plans are risky, for him?" one scholar wrote Thursday — and Stanford University's Hoover Institution, from which Trump plucked economics fellow Kevin Hassett as his director of the National Economic Council.
As a symbol of the cross-partisan accord on this front, Bill Clinton's former Treasury secretary and Republican ex-senator Phil Gramm co-wrote a Wall Street Journal missive against tariffs and encouraged other economists to sign on, in the spirit of the more than 1,000 U.S. economists who inked a letter pleading against the Smoot-Hawley Tariff Act of 1930, which many argue worsened the Great Depression.
"The old line is that economists disagree about everything," David Henderson of the Hoover Institution told CBC News. "But on tariffs there's almost total consensus that high tariffs are bad. And this 25 per cent tariff is a high tariff."
It was telling in that veteran economist's mind that when he heard that Trump named tariff advocate Stephen Miran as chair of Council of Economic Advisers, Henderson had never heard of the guy. Nor had most of his friends in trade economics, Henderson said.
In a paper Miran wrote last fall, he argued that tariff rates at 20 per cent are "optimal" for U.S. revenue and overall welfare, while anything up to 50 per cent won't be harmful. However, he also offered this proviso, to be perhaps thrown into the churning debate about Canada's fight-back strategy: "Retaliatory tariffs by other nations can nullify the welfare benefits of tariffs for the U.S."
(Miran is a fellow with the Manhattan Institute, where his pro-tariff views are not widely shared, if headlines like "Why the deep state loves tariffs" and "Economists are wrong a lot, but not about tariffs" are anything to go by.)
But Trump has been able to surround himself with individuals like Miran who help back up the president's own zeal for slapping import taxes on other countries' goods. His incoming secretaries of Treasury and Commerce have backed his vision to varying degrees, while Hassett downplayed the wide fears of price shocks on Fox Business this week.
"When the people who are trying to cause panic over President Trump's trade policy simulate what it's going to do, they don't account for all the other policies," he said.
"So President Trump is drill, baby, drill, and deregulate and tax cuts and reduce spending."
While Trump has praised the late-19th-century tariffs of Republican president William McKinley, the party has, since the 1950s, been the side that backed free trade over protectionist impulses, Henderson says. That could explain why the conservative economic orthodoxy is so firmly against Team Tariff.
But when Henderson spoke to a Libertarian Party chapter event in California last week, he says it struck him that many of the Trump supporters in the crowd seemed to be skeptical of his points about trade. Trump's "cult of personality" has brought his fans' attitudes into alignment with his own, and much of the Republican voter base along with it.
An Ipsos poll for Reuters conducted after Trump's Jan. 20 inauguration showed a clear majority of Americans remain opposed to tariffs on Canadian goods — including 88 per cent of Democrats and 66 per cent of independents — but only 37 per cent of Republicans disagree with tariffs at the northern border.
One could look at that in two ways: On one hand, most of his party still wants him to forge ahead and launch a potential trade war. On the other hand, close to two-fifths of his very own party believes he's on the wrong track.
In the Leger survey, even a majority of the respondents who were members of Trump's party say that tariffs will increase the price of goods and services in their country.
And that's before they're in place, and all the warnings from economists and oil lobbyists and traditional politicians potentially come to pass and hit Americans' wallets.
"Whatever people thought, if they see the price of gasoline going up 15 to 20 cents a gallon, they might wonder," Henderson says.
LISTEN | Economist Oren Cass supports tariffs to bring jobs back to U.S.: