Study Analyzes Potential Canadian Retail Cost Spikes If NAFTA Ends
Businesses across five Canadian retail sectors could see costs swell at a ratio of $1 billion for every 1 percent U.S. tariff hike should a post-NAFTA U.S. embrace a protectionist approach, according to an analysis by a global management consultancy…
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released Nov. 27. If Canada were to retaliate against any U.S. tariff hikes above WTO commitments, and “if we assume a 20% tariff across the board on key retail import categories ... the impact is a devastating $21 billion cost increase for retailers, across automotive, household goods, electronics, food, and appliances,” Retail Council of Canada Vice President of Public Affairs Karl Littler said in a statement. “The whole retail sector is hit hard.” A.T. Kearney led the study, integrating analysis from Statistics Canada, the World Bank, Euromonitor, Scotiabank, the U.S. Department of Agriculture, the Canada Border Services Agency and “US foreign trade statistics,” lead project analyst Raj Mukherjee said. The study also explores the scenario that a U.S. NAFTA withdrawal would bring about a return of the U.S.-Canada Free Trade Agreement. “The rules of what happens after NAFTA are not very clear,” A.T. Kearney trade specialist Johan Gott said. “If NAFTA were dissolved, the White House and Congress would have to agree to new rules, and that has proven a very difficult and long process on other important issues.”