Understanding tariffs might help you cope with the tough times ahead, says Tatiana Levit
It’s a stressful time of year for students right now, with essays due, final exams looming and job applications being sent out.
Adding to that uneasiness is the economic uncertainty of the ongoing trade dispute with the United States.
Politicians and experts are predicting dire consequences for the economy if the wide-ranging tariffs triggered by U.S. President Donald Trump last for long.
So how is your typical U of R students supposed to respond?
Tatiana Levit has some ideas.
She’s an assistant professor in the faculty of business administration who is currently discussing tariffs in her international marketing course (BUS 415).
“I noticed that even our students who are in business school might not always understand the complexity of how [tariffs] work,” she said.
Yet it’s important for all students to get their heads around what’s happening and make plans to cope with the changes, she says.
“I don’t want to bring more stress to our students,” she said. “They are already stressed. There is already a lot of pressure, in terms of how to survive in this economy. But unfortunately, things might get worse.”
It’s hard to turn on the TV or scroll through your phone without getting bombarded with the latest tariff developments.
Trump in particular has been a firehose of announcements that seemingly change from day to day.
Earlier in the month, the U.S. slapped 25 per cent levies on steel and aluminum being imported from Canada.
Canada responded with $30 billion worth of counter-tariffs on goods imported from the U.S.
Meanwhile, China recently announced tariffs on Canadian canola oil and meal, peas, fish, seafood and pork products.
That was in retaliation for Canada’s making it more expensive to import Chinese steel, aluminum and electric vehicles.
Levit says Trump has sown some confusion about who ultimately pays the tariffs.
U. S. tariffs are a tax paid for by American companies and passed along to American consumers and the same principle applies to the Canadian counter-tariffs.
“Who pays the tax? Well, again, it’s Canadians who pay that import tax,” she said.
“It’s either the Canadian company that pays it or, eventually, the Canadian consumers.”
Though Canada’s exporters will not be the ones paying the raised import tax directly, exports will be affected, and that impact will be felt throughout the nation, she said.
It’s an unfortunate development, she says.
“With the U.S., we were the two countries who had the closest trade relationship in the world, and both were very reliant on each other,” she said. “Canada, of course, much more, because about 74 per cent of our exports go into the states.”
Levit also weighed in on the “Buy Canadian” movement that has been growing exponentially throughout the country.
“The push that stores see from consumers right now for Canadian products, will make them less willing to buy imported goods and they will use local vendors more,” she said.
“For individuals, whether or not they participate in that [movement], that will be the reality anyway.”
As for students?
“I would say that if it’s something that you can afford to do, then you can do as much or as little as you can,” she said.
“Even a little contribution helps if you change one type of product and buy it from a local producer.”
That could mean, for example, going to a local restaurant twice a month instead of once a month.
Finally, Levit has some words of encouragement for students worried about the current state of affairs.
“I would say stay optimistic,” she said. “Strong economies, like Canada’s, have the resilience to withstand blows like that — things will return to normal.”
