Experts suggest that the intensifying trade conflict between Canada and the United States will result in increased expenses for both consumers and businesses, affecting everything from smartphones to gaming devices and AI infrastructure.
Last year, Canada sent over $4 billion US worth of electronic goods to the U.S., which are now impacted by President Donald Trump’s newly imposed 50 percent tariffs on various products. Among the exports most affected by the new U.S. tariffs are specific electrical boards and controllers, which hold significant value.
On Saturday, Prime Minister Mark Carney announced that Canada would impose matching tariffs, dollar for dollar, in response to the Trump administration’s actions.
According to specialists, price hikes are almost inevitable as the deepening trade conflict jeopardizes businesses on both sides of the border.
Carol McGlogan, the president and CEO of Electro-Federation Canada, represents over 230 firms in the electrical and automation industry.
“The 50 percent tariffs are catastrophic,” she expressed on Monday.
McGlogan noted that 90 percent of the exports from members of Electro-Federation Canada are directed to the U.S.
“Price increases will raise the costs associated with homes, schools, and buildings,” she stated.
“We recognize the necessity to double the size of the [electricity] grid by 2050… with tariffs being imposed on both sides, we have merely escalated the expense for everyone involved, which will ultimately be borne by taxpayers.”
Evan Light, an associate professor at the University of Toronto, indicates that prices for items such as gaming consoles and smartphones have already been rising due to chip shortages and supply chain disruptions. He anticipates that the latest developments in the Canada-U.S. trade war will further inflate these prices.
Traffic to the Canadian e-commerce platform Common Goods has surged by 300 percent since the collapse of trade negotiations between Canada and the U.S., as reported by owner Valerie Crisp. She indicates that the increased interest in purchasing Canadian products persists despite the complexities introduced by the new tariffs.
“In the short run, I believe it will be quite challenging for everyone,” he remarked. “We can expect to see many costs passed on to consumers.”
“We’ll notice this in the heightened prices of the devices we purchase,” he continued.
Kinaxis, based in Ottawa, develops software utilized by businesses to oversee their supply chains. Chief product officer Andrew Bell mentioned that many of their clients are exploring new suppliers using the company’s software.
“While the tariffs may initially affect supply chains, the impact ultimately reaches the end consumer,” he stated.
Will tariffs hinder AI adoption?
Bloomberg News recently reported that Nvidia, one of the most lucrative companies globally, has alerted customers to anticipate a price increase of up to 15 percent for its highly sought-after AI chips.
“Supply chain issues, whether they stem from tariffs or other disruptions, can restrict or limit … supply. This leads to higher costs for those components,” Bell remarked. “This is precisely what we are witnessing, and companies like Nvidia are experiencing it as well.”
Professor Light from the University of Toronto questions whether the trend of rising prices might ultimately slow down the adoption and implementation of AI technologies.
“It provides an opportunity to reassess our commitment to investing in the AI sector, particularly since the costs will be amplified in both the U.S. and Canada,” he noted.