PLATTSBURGH — New tariffs on Canadian products and counter-tariffs by Canada could have a major impact on North Country business.

Local business leaders say the outcome could mean a loss of more than $1.1 billion to the economy of New York, making it one of the states most impacted by the tariffs.

“It is entirely an act of self-harm to impose these tariffs on Canada,” North Country Chamber of Commerce President Garry Douglas said. “The U.S. and Canada do not trade any longer. We make things together, and that is a crucial element for making the U.S. more competitive with China and the rest of the world.

“For example, on average the Canadian manufactured goods entering the U.S. have 25 percent of U.S. content, reflecting our highly integrated supply chains.”

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Integration with Quebec

The tariffs on steel and aluminum from Canada, instituted by President Donald Trump, went into effect on June 1.

Canada, Mexico and Europe had been exempted from import duties of 25 percent on steel and 10 percent on aluminum when they were first imposed in March, but those exemptions expired as scheduled last Friday.

Canada has announced that, effective July 1, they will impose counter-tariffs on about $16 billion worth of U.S. products going into Canada.

Douglas said the trade war could have a major impact on the North Country, which features a strong transportation and aerospace industry utilizing several Canadian companies.

“Here in the North Country, one of our greatest sectors of growth and opportunity is transportation equipment and aerospace, with 52 companies now employing more than 8,500 North Country residents,” he said.

“This growing sector is highly interconnected with Canada and, for the most part, is here instead of places like North Carolina or Alabama because of the proximity to these supply chains.

“And it doesn’t benefit sectors like aluminum, either, with Alcoa in Massena and the United Steelworkers there calling for the exemption of Canada as these tariffs actually negatively impact their operations and prospects, thanks in part to the high level of integration with Alcoa in Quebec.”

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May raise prices

North Country Congresswoman Elise Stefanik, R-Willsboro, a member of the Northern Border Caucus, is strongly against the tariffs imposed by the United States

“If President Trump wants to target Chinese steel dumping, he should target tariffs at China and not at our friends to the north,” she said in a statement. “The shared production of goods by the U.S. and Canada actually makes our goods more competitive in global markets against China and others.”

Stefanik said the tariffs will raise prices for businesses in the district that use steel and aluminum, and those costs will be passed on to consumers.

“Furthermore, as a Northern Border district, I am concerned that these tariffs could incentivize Canadian firms in our district to leave,” she said. “Thousands of manufacturing jobs in the North Country are directly tied to Canada and cross-border supply chains, including more than 8,500 in the transportation equipment sector alone.”

Stefanik said she will continue to work in Congress to strengthen the United State’s trade relationship with Canada, including in the ongoing renegotiations of the North American Free Trade Agreement.

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Counter-tariffs

Former Congressman William Owens, a Plattsburgh attorney who has conducted cross-border business for decades, said the tariffs could have long-lasting effects.

“In the short term, I don’t think there will be significant impact on Bombardier, Nova Bus and their vendors, as they have had to comply with Buy America provisions, which means they are purchasing U.S. steel and aluminum,” he said. “That may change if these tariffs stay in place long term.”

Owens said the counter-tariffs by Canada — on such goods as sleeping bags, maple syrup, toilet paper, orange juice, soy sauce, tomato ketchup, salad dressings, dishwasher detergents and more — could very well create a surprise for Canadians who shop in the United States when they find at the border they have to pay a 10 to 25 percent tariff, depending upon the category of goods they purchased.

“Obviously, once the word gets out, it could have a negative impact on shoppers desiring to come down to Plattsburgh,” he said.

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‘Ridiculous pretense’

Owens also said that, in his view, the tariffs imposed by the president violate NAFTA and the World Trade Organization guidelines, “under the utterly ridiculous pretense of national security.

“In Canada’s case, it rises to the level of incredulous as Canada is a partner in NORAD [North American Aerospace Defense Command] and has access to much of our national security information,” he said.

“As Prime Minister [Justin] Trudeau has said, this specious claim is insulting to all Canadians. This decision is already having even broader impacts as China has terminated negotiations on trade with the U.S. this weekend, and it is hard to imagine Canada and Mexico trusting the U.S. in the ongoing NAFTA negotiations.”

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‘Most galling’

Douglas agreed that the tariffs could have a wide range of negative effects.

“The dollar costs of these tariffs to consumers and suppliers will take some time to feed through the economy, but the immediate impact for the North Country is heightened uncertainty with our bi-national companies and their supply chains, which will be sure to chill decisions and investments that otherwise would be made,” he said.

“Most galling, perhaps, to our Canadian friends is that these tariffs are being imposed on grounds of national security, treating a valued security ally of 100 years the way we would treat China or Venezuela.”

Douglas noted that Canadians helped the United States during the terrorist attacks of Sept. 11, 2001, hosting American air passengers who had to land there at the time, and that Canadian soldiers have died alongside U.S. forces in Afghanistan. Neither Mexican nor Chinese military has supported the cause there.

“Canadians are right to take offense at the legal grounds being used to impose these actions, and this will now be part of the collateral damage to the relationship we in the North Country will need to help repair, even once this wrongful trade war with Canada comes to a conclusion,” he said.