Potential Benefits of a 25% Tariff on Canadian Goods and Services

"Tariffs that save jobs in the steel industry mean higher steel prices, which in turn means fewer sales of American steel products around the world and losses of far more jobs than are saved." ~ Thomas Sowell

"The benefits of a tariff are visible. Union workers can see they are "protected". The harm which a tariff does is invisible. It's spread widely. There are people that don't have jobs because of tariffs but they don't know it." ~ Milton Friedman

"As history has repeatedly proven, one trade tariff begets another, then another - until you've got a full-blown trade war. No one ever wins, and consumers always get screwed." ~ Mark McKinnon

"We shouldn't be putting tariffs on anything. That hurts working men and women in US. What we should be doing is making our manufacturing more competitive." ~ Rick Santorum

"Any time you read that your government is erecting tariff barriers, supporting threatened industries with subsidies, or interfering in any way with free trade between individuals or nations, you must realize that your standard of living is being lowered as a result." ~ John Pugsley

You must weigh in all the pros and cons of having a 25% tariff imposed on all goods and services coming from Canada.

Although tariffs might be considered as a form of showing disrespect to the economy, there are some circumstances that justify having tariffs. Making Canadian goods pricey might protect U.S. industries in agriculture, manufacturing, and the energy industries due to the imposed 25% tariffs. It would be beneficial for American producers because they can either retain or win more jobs for themselves by besting their competition in the market.

The American Trump government uses these tariffs as a bargaining chip in the course of trade negotiations.

This approach helps the U.S. to advance and solve specific trade imbalances or disputes with Canada. For instance, the tariffs will push Canada to give in to better terms on intellectual property, digital trade, oil, gas, and other raw materials the American economy needs. Rightfully so, the Trump government will urge the Canadian government to do much more in pushing critical issues related to controlling fentanyl production and exportation, a fast-emerging threat for the national security of both the United States and Canada, as well as for public health.

Imposing 25% tariffs might force American companies to invest more in domestic production.

By reducing dependence on Canadian imports, U.S. businesses may strengthen local manufacturing and infrastructure, which is highly unlikely but a slight possible increase in production. Most importantly, with huge domestic tax cuts, tariffs levied against all countries generate revenue for the American government, which is going to be used into infrastructure projects or programs to mitigate the impact of higher prices on consumers.

You should also consider the negatives, when imposing tariffs against your closest historical, socio-political and economic ally.

Higher tariffs against America's closest ally will create a rise in the cost to the consumers, thereby breaking supply chains and creating potential inflation in both countries, Canada, and the USA. Canada retaliates with its tariffs against the USA, which grows into a full-blown trade war that would negatively affect the two economies. Diplomatic ties with one of the U.S.'s closest allies could get strained, and the long-run implications on the trade relationship could outweigh the immediate benefits.