REGINA - The University of Regina hosted a panel discussing the current trade relationship between the U.S. and Canada and how it will affect the economy.
Ron Styles, a lecturer at the U of R economics department, was included in the panel
He gave his take on U.S. President Donald Trump imposing tariffs because of fentanyl getting across the border.
"I think the issue is quite simply an excuse." back Styles point with only 43 pounds of fentanyl being seized at the U.S-Canada border in 2024. When you compare that to the America-Mexican border in the same year, that number spikes to 21,889 pounds.
Styles believes the real reason for the tariffs is bringing capital movements back into the U.S.
In Oct. 2024, a positive capital inflow of over $200 billion USD. Positive capital inflow can help foster economic growth.
While the U.S. is recording positive inflow, Canada, on the other hand, has seen negative numbers recently. $7.446 billion USD decrease of capital inflow in the 2Q of 2023.
Even though Canada’s capital inflow is struggling, it still poses a threat to the U.S. in terms of attracting investors and businesses, said Styles.
"[Trump] would like to draw all of that [and] move some of what is in our economy here in Canada back down to the United States.," he said.
There’s also the issue of revenue in the U.S., which recorded a budget deficit surge
By putting tariffs, which is a tax on Canada, it will increase the revenue towards the American government.
Even though the tariffs will aid the government, it will cause affordability issues for American businesses.
"[Companies] like Tesla are going to have problems selling internationally because the U.S. is putting tariffs on the auto industry."
Effects on Sask.
One immediate threat for the province is potential canola tariffs from both the U.S and China. After Canada imposed 100 per cent tariffs on Chinese-made electric vehicles, China plans to respond with a 100 per cent tariff on Canola, meat and peas.
This comes as the U.S. is also considering putting tariffs on Canada for Canola.
According to Styles, 84 per cent of Canola from Sask. was exported to China and the U.S. in 2023.
Premier Scott Moe has made those impacts clear, saying it would decimate the canola industry in Sask.
With the 2025 spring budget set to be revealed next week, the Sask. government has stressed the challenges of the constant changes with the tariffs when focusing on investment into different sectors.
Other provinces, like Alberta, which incorporated the implementation of tariffs. After reporting a positive $5.8 billion fiscal surplus in 2024-25, the province is expecting a $5.2 billion deficit in 2025-26.
As for Sask., it’s unclear whether they will factor in tariffs for their budget.
Solutions
In terms of ending the U.S.-Canada trade war, Styles believes the key is maintaining the relationships between the two countries.
Styles agreed with the federal government's decision to include the U.S. in the G7 meeting, which helps keep their relations in check.
He also stressed remembering that the U.S. could have a new president in four years, and all the tariffs could be reversed by then.
With the U.S. imposing tariffs now on Mexico, China and Europe, Styles feels they’ll have significant problems on their hands.
