OTTAWA — Canadians considering the purchase of certain American-made appliances, electronics, cosmetics and other consumer goods may want to make their decision sooner rather than later, as a new round of Canadian counter-tariffs is scheduled to take effect Sept. 8.
The retaliatory measures, announced after Canada-U.S. trade negotiations broke down on Aug. 21, will impose tariffs of 15, 25 or 50 per cent on roughly 700 categories of American imports valued at approximately $27.6 billion.
The targeted products range from smartphones, makeup and kitchen appliances to clothing and certain dairy products, raising concerns that Canadians could soon face higher prices at stores.
Ian Lee, an associate professor at Carleton University’s Sprott School of Business, says consumers who already know they need a tariff-affected product may have an incentive to purchase it before Sept. 8.
That could be particularly relevant for major household appliances. Someone whose refrigerator or washing machine is nearing the end of its life, for example, may want to compare prices now rather than risk paying more once the tariffs begin affecting replacement inventory.
However, economists are cautioning Canadians against panic buying or unnecessarily stockpiling everyday goods.
McMaster University economist Colin Mang says Ottawa has been selective in deciding which American products to target, partly because Canadian-made or internationally sourced alternatives are available for many of them.
Consumers strongly attached to a particular American brand of cosmetics, clothing, handbags or another tariff-affected product may have a reason to buy before the new duties take effect.
For ordinary household necessities with numerous alternatives, however, there is little justification for rushing to stores.
Products such as toilet paper are available from multiple Canadian and international suppliers, meaning shoppers should generally be able to switch brands rather than pay a tariff-driven premium.
The important distinction for consumers is therefore between products they genuinely need or strongly prefer and purchases made simply because tariffs are coming.
Although tariff rates as high as 50 per cent sound dramatic, economists also caution that a 50 per cent tariff does not necessarily translate into a 50 per cent increase in the retail price.
Experience from Canada’s previous round of retaliatory tariffs demonstrates why.
A Bank of Canada study examining the effects of earlier 25 per cent Canadian counter-tariffs found that prices of affected goods increased by an average of about six per cent compared with non-tariffed products. The measures contributed roughly 0.3 percentage points to consumer price inflation.
One reason the increase was considerably smaller than the tariff itself was that retailers absorbed part of the additional cost rather than passing all of it on to consumers.
Competitive pressure also limited retailers’ ability to increase prices. If an American product suddenly became significantly more expensive while comparable Canadian, European, Asian or other imported alternatives remained unchanged, shoppers could simply switch products.
That same competitive dynamic could influence what happens after Sept. 8.
American manufacturers, Canadian importers and retailers may each absorb part of the tariff, while some businesses could change suppliers altogether. Others may increase prices, particularly when there are few alternatives available.
Consumers could therefore see widely different effects depending on the product.
The latest measures are part of a much larger escalation in the Canada-U.S. trade dispute. After negotiations collapsed in August, Washington imposed tariffs of up to 50 per cent on billions of dollars worth of Canadian products. Ottawa responded by announcing dollar-for-dollar countermeasures against selected American imports.
The dispute is also influencing consumer attitudes.
Some Canadians have already been deliberately avoiding American products and choosing Canadian-made alternatives. Others are looking to suppliers from Europe, Asia and elsewhere when comparable products are available.
Lee cautions, however, that consumer boycotts should not necessarily be expected to change U.S. government trade policy. While choosing Canadian products may support domestic businesses and give consumers a way to express their preferences, individual purchasing decisions alone may have limited influence over Washington’s tariff strategy.
For Canadian households, the most practical response may therefore be selective rather than dramatic.
If a refrigerator, washing machine, smartphone or another expensive tariff-affected American product is already on the shopping list, comparing prices and alternatives before Sept. 8 could make financial sense.
If the purchase is not necessary, consumers may be better served by waiting to see how much of the tariff actually reaches retail prices and whether stores introduce Canadian or non-American alternatives.
And when it comes to everyday products with plenty of substitutes, economists see little reason to fill basements and garages with extra supplies.
The tariffs may make some American goods more expensive, but they are unlikely to make everyday products disappear from Canadian shelves.