Tariff threats are generating cost uncertainties in B.C.’s retail sector, but for Greg Wilson, consumers should expect prices to remain relatively stable in the short term.
“If there's a recession, there can be price drops,” said Wilson, B.C. director of government relations for the Retail Council of Canada. “That's also a possibility [that] less demand sometimes results in price drops.”
The Americans have paused wide-reaching 25 per cent tariffs on most Canadian exports. But U.S. tariffs on Canadian steel and aluminum exports went into effect Wednesday. Ottawa plans to impose $30 billion in targeted tariffs against the Americans beginning Thursday.
“An amount of vegetables that come from the U.S. we might be able to source from Mexico,” said Wilson, who believes U.S. tariffs on their southern neighbours could open up availability for Mexican products in Canada.
“We'll see how our relationship with Mexico changes,” he said. “We both need markets for our products, and they might have products that might become a little less competitive in the U.S. market with a 25 per cent tariff on them.”
Jennifer Woike, president of the BC Agriculture Council, told BIV that tariffs on heavily imported vegetables and fruits from the U.S. could inevitably raise prices for consumers in B.C.
Figuring out how prices in grocery stores might change is complicated, said Wilson.
If there’s a tariff on American lettuce, you’d expect that price to go up. On the other hand, the price for domestic lettuce might not – just like it could go up if demand is high enough, he said.
“Agricultural products, a lot of them are supply controlled in Canada,” said Wilson. “For the most part, we have enough supply for our own country.”
In parallel with ramifications to the agricultural industry and grocery stores, other retail sectors like appliances might be significantly impacted from tariffs.
Wilson says that American appliances where the first part is manufactured in Mexico and the second part is done in the U.S. could experience double tariffs on their way to B.C. Nevertheless, the duration of Canada’s tariffs on large appliances are unclear at this moment, he said.
That means if someone sells appliances, they might need more South Korean appliances than American ones because demand parameters will shift, said Wilson.
He said prices could also increase for consumer products like cleaners or paper products over time, as the North American economy is so integrated with cross-border selling.
“There's certainly evidence right now that a significant segment of consumers is looking at where things are made,” said Wilson. “It seems, so far, to be less of a buy Canadian phenomenon than maybe a don't buy American phenomenon.”
Aside from Mexico, if retailers are unable to source their products at a reasonable price in the existing markets, they’ll look for alternative sources like Asia, said Wilson.
