Aug 14, 2024 - 14:12
By cbc.ca

The political consensus on taxing Chinese imports is now complete — your move, Minister Freeland

Now that Conservative Leader Pierre Poilievre and his party have joined the chorus calling for more action against Chinese imports, a key decision facing Finance Minister Chrystia Freeland this month just got a little easier.

Cross-party consensus on the wisdom of lining up with the Biden administration's incoming tariffs on made-in-China electric vehicles provides the government with more political cover. But there's still a risk of incoming flak.

To understand how complicated this gets, consider how then-president Donald Trump's earlier campaign against Chinese state-sponsored overproduction played out for the United States and its trading partners in what was then NAFTA, now the Canada-United States-Mexico Agreement (CUSMA). That policy debate got very confusing for voters who like to slot politicians on a predictable left-right axis.

U.S. Republicans — previously champions of global trade liberalization and low taxes — suddenly had a president whose throngs of supporters embraced tariffs as the ultimate economic weapon to protect American jobs.

But the businesses and consumers paying Trump's tariffs on Chinese goods were American.

Tariffs are taxes. When they're applied to commodity goods that are essential inputs for manufacturing (steel and aluminum, for example), they trigger inflation.

That doesn't always matter to lobbyists working for powerful industries. For example, softwood lumber duties on Canadian 2x4s have driven up the cost of housing construction in the U.S. for years. They're still in place — just went up again, in fact — and remain a major cross-border trade irritant.