US-Canada trade war raises prices and harms business ties in northwest

A United States tariff is an import tax, ultimately paid by U.S. consumers, as importers cannot absorb much or any of the tax.

Likewise, a Canadian tariff is an import tax ultimately paid by Canadians.

The president‘s threats of 50% tariffs on goods we purchase from Canada have turned into reality. Canada decided to tax Canadians 50% on goods they purchase from us, in an attempt at retribution.

Now, we all suffer: close neighbors, allies, friends and families in both countries.

Milton Friedman said, “the only thing tariffs protect us from is lower prices.” That applies here at home and across the nearby border … pushing up prices across the board.

Worse than the higher prices may be the long-term change in business relationships between countries. A Canadian wanting to buy a U.S. product soon costing 1.5 times as much may instead buy a product from another country; and an American buying Canadian goods at 1.5 times the price will look abroad as well.

We know this is reality. When President Jimmy Carter forced a wheat embargo against the Soviet Union in 1980, U.S. grain farmers suffered. The U.S.S.R. was hardly affected, because they switched to grains grown in other countries. President Ronald Reagan lifted the embargo a year later, but I doubt if our farmers ever recovered the business.

We’re in this foolish moment where our president says, in effect, “I’m going to tax U.S. consumers until you do xyz!!” And, in reaction, the Canadian government responds, “That’s not fair! So, I’m going to tax MY consumers in retaliation!”

Shooting ourselves in our own feet is painful.

Over our 40-year history, Schweitzer Engineering Laboratories has built solid relationships between businesses, individuals and families in Canada, Mexico and elsewhere.

Free trade may be the best ambassador of goodwill and prosperity any country could enjoy!

I’m saddened and disappointed by the destructive tariff actions of the current U.S. executive branch, and the inactions of Congress to act and remind the executive, through conversations and legislation, that Congress is responsible for tariffs.

One might think our representatives would take some action, as midterm elections loom large. Or maybe incumbents would rather hand the opportunity to defend our economic and political freedom over to their successors.

May we encourage our elected officials to rethink fighting trade wars with our allies, and to try to recover as quickly as possible from the current and imminent destruction of tariffs. May we rebuild any damage to the relationships already done and continue to grow even stronger relationships built on economic and political freedom.

Edmund O. Schweitzer III, Ph.D., is the founder and chairman of the board of Schweitzer Engineering Laboratories in Pullman, Washington. The company also has locations in Idaho.