Experts are warning that the ongoing trade conflict between Canada and the United States is set to drive up costs for consumers and businesses across various sectors, ranging from cellphones to gaming consoles and artificial intelligence infrastructure.
Last year, Canada shipped 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 President Donald Trump. Among the targeted export categories, certain electrical boards and controllers face the highest impact from the new U.S. levies.
Prime Minister Mark Carney announced that Canada would match the U.S. tariffs dollar for dollar in response.
Industry experts predict a definite rise in prices as the escalating trade tensions pose a threat to businesses on both sides of the border.
Carol McGlogan, the president and CEO of Electro-Federation Canada, representing over 230 companies in Canada’s electrical and automation sector, expressed concern over the detrimental effects of the 50 per cent tariffs, emphasizing that 90 per cent of their exports are directed to the U.S.
McGlogan highlighted that the price hikes will impact various sectors such as homes, schools, and buildings, pointing out that the increased costs will ultimately burden taxpayers, especially as the need to expand the electricity grid by 2050 becomes more costly due to the tariffs.
Evan Light, an associate professor at the University of Toronto, noted that prices of items like gaming consoles and cell phones have already been increasing due to chip shortages and supply chain challenges. He anticipates that the trade dispute between Canada and the U.S. will further elevate the 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 further commented that the trade war repercussions will likely lead to increased prices across the board, affecting consumers directly through higher device costs.
Andrew Bell, the Chief product officer at Ottawa-based Kinaxis, a software company specializing in supply chain management, mentioned that many clients are already exploring alternative suppliers in response to the tariffs. He emphasized that while the initial impact may be felt within the supply chain, the ultimate burden will fall on consumers purchasing the end products.
Will tariffs slow AI adoption?
Bloomberg News recently reported that Nvidia, a leading company in artificial intelligence technology, is cautioning customers about potential price increases of up to 15 per cent for its AI chips.
Bell highlighted that challenges in the supply chain, including tariffs and disruptions, result in increased component costs, as evidenced by companies like Nvidia adjusting prices accordingly.
Light raised concerns about the long-term effects of rising prices, questioning whether the trend could hinder AI
