A surge in tariffs between Canada and the United States is poised to drive up costs for consumers and businesses, impacting various sectors from electronics to artificial intelligence infrastructure. Last year, Canada exported over $4 billion US worth of electronics to the U.S., which are now subject to President Donald Trump’s new 50 per cent tariffs. Notably, certain electrical boards and controllers represent the highest export category facing these new levies.
Canada’s Prime Minister Mark Carney has announced plans to match the U.S. tariffs dollar for dollar. This move is expected to lead to inevitable price hikes as the trade dispute intensifies, posing threats to businesses on both sides of the border.
Carol McGlogan, President and CEO of Electro-Federation Canada, expressed concern over the devastating impact of the 50 per cent tariffs. She highlighted that 90% of the exports from the industry group go to the U.S., warning that these price increases will have trickle-down effects on various sectors like housing and infrastructure development.
Evan Light, an associate professor at the University of Toronto, noted that items such as gaming consoles and cell phones have already been experiencing price hikes due to chip shortages and supply chain challenges. The escalation of the trade war between Canada and the U.S. is expected to exacerbate these price increases further.
Andrew Bell, Chief Product Officer at Ottawa-based Kinaxis, emphasized that while tariffs may initially affect supply chains, the ultimate burden falls on consumers who will bear the increased costs of products. He pointed out that disruptions in the supply chain, including tariffs, lead to elevated costs for components, as seen with companies like Nvidia increasing prices for artificial intelligence chips.
Concerns have been raised about the potential impact of higher prices on AI adoption and deployment. University of Toronto professor Light highlighted that the escalating costs may prompt a reassessment of investments in the AI sector, given the multiplied expenses in both the U.S. and Canada.