By Elsa Cunnington – Contributor
Tariffs have been making headlines with the return of the 45th president south of the border, threatening Canada and global markets.
On Jan. 27, three Bishop’s professors took the time to break down exactly what tariffs are and tackle their historical, political and economic impact.
Organized by the Chair of the History Department, Dr. David Webster, professors Dr. Gordon Barker, Dr. Gilbert Gagné and Dr. Heather McKeen-Edwards each brought their expertise to this informative panel.
United States Historian and History professor Dr. Barker gave a brief overview of American tariffs and their role in nation-building.
Emphasis was put on the Moral Tariff following the 1857 panic which brought the North and South closer to the Civil War, the McKinley Tariff of 1890 which was used to annex Hawaii, the Hawley Smoot Tariff of 1930 that worsened the Great Depression, as well as the Atlantic Charter of 1941.
With this history in mind, Dr. Barker warned of the significance of the new administration’s renaming of Alaskan mountain Denali Mount McKinley as Donald Trump threatens various countries with tariffs and annexation.
The McKinley tariff increased from a 38 percent tariff to a 50 percent one but removed duties on sugar, which took away the sugar deal the US had with Hawaii.
Essentially, this led wealthy sugar owners to want to be annexed to renew their economic deals. Using economic tactics, the United States claimed they did not take Hawaii in conquest, but allowed them to join as it was ‘what they wanted’.
Politics and International Studies professor Dr. McKeen-Edwards brought us up to speed on what tariffs are and why a state might use them, with “no math, I promise.”
She explained that tariffs are a type of trade barrier that stops imports from coming into a country, usually to boost local industry.
Whether that boost happens depends.
Tariffs show up as a form of tax that the importer, not the exporter, pays.
This means that the country the tariff is imposed on will not pay the tax, but may need to find new markets for their exports.
When Trump claimed that ‘we will both lower prices and increase tariffs’ will be “incredibly difficult to do”, she explained, “because that’s simply not how they work.”
There are two types of tariffs, blanket tariffs on a whole country which are rare, and sector-specific tariffs on important industries like lumber, steel, or energy.
Tariffs against Canada would target those sectors and if Canada issued counter tariffs they would be targeted at agriculture.
The benefits of tariffs, Dr. McKeen-Edwards said, are uneven, though governments will often see increased revenue. Most likely the cost of these tariffs will be borne by the consumers, as seen by the similar tariffs imposed in 2018 and 2019.
Politics and International Studies professor Dr. Gagné followed by talking about how exposed to the imposition of US tariffs Canada is, as 75 percent of our exports go to the US. Tariffs used to be the norm, but following the Hawley Smoot Tariff of the Great Depression, tariffs were lowered to an almost negligible level between industrialized countries by the end of the 1980’s.
Dr. Gagné explained that Trump’s “idea brings North America back some 60 years” and that he is doing this for political gain, “for who?
For him.” From a protectionist point of view, imposing these tariffs serves the goal, but the question remains; “how far will the US go?”
Some say until Canada and Mexico agree to renegotiate NAFTA, but Dr. Gagné argues that renegotiating NAFTA now would be self-defeating. Under the threat of these tariffs, the US could ask for further concessions.
So how concerned should we be?
Dr. Gagné said that if imposed, we should be concerned as Canada has “some leverage but not so much” and “the US can do without Canadian oil.”
He continued by saying Trump must love this as “it’s a raw exercise of power.”
Although very informative, second-year Geography student Henry Mitchell explained that he found it “interesting, but discouraging”, saying that he hopes that these proposed tariffs will create more global cooperation for Canada.
Though we may not be able to do much at the moment, we were encouraged to keep apprised of the situation so we can continue to make informed decisions.
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