HRAI Calls for Canadian Government to Negotiate to Avert Looming US Tariffs

HRAI members have been asking about HRAI’s positioning on the matter of Canada’s response to the imposition of tariffs on Canadian goods and services by the US government.  HRAI has been monitoring developments on both sides of the US-Canada border since November and has participated in discussions with larger industry groups like the Canadian Chamber of Commerce.  HRAI leadership concluded that it would be more effective to align industry support with the Chamber and other large industry umbrella groups – provided that their positioning aligns with the views of members.  HRAI also did not rule out making a public statement on behalf of the industry. 

To confirm that this approach would have the support of members, especially manufacturer members directly affected by tariffs, HRAI conducted a member survey earlier this month.  The survey responses revealed that manufacturers and wholesalers are very concerned about the establishment of tariffs on either side of the border.   

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Almost 70% of members expressed at serious (“considerable” to “extreme”) concern about the imposition of tariffs by the US, and about 64% expressed serious concern about the prospect of retaliatory tariffs by the Canadian government. 

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The survey asked members to predict what actions they would have to take in light of different tariff scenarios and the predictions are that drastic measure will have to be taken.  Most predict a strong likelihood of production slowdowns, postponed or cancelled capital investments and/or hiring freezes and layoffs. 

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Members were also invited to offer their opinion on some of the policy responses that might be taken by the Canadian government in the face if US tariffs.  Members were offered four potential responses:  

  1. Canada should negotiate vigorously to avoid the imposition of any tariff regime by the United States on products imported into the US. 

  1. Canada should negotiate to reduce potential US-imposed tariffs to something lower than 25%. 

  1. If US tariffs are imposed, the Government of Canada should retaliate by introducing equivalent tariffs on goods coming into Canada. 

  1. If US tariffs are imposed, the Government of Canada should retaliate by introducing selective tariffs on certain goods coming into Canada. 

As the following chart shows (not surprisingly) the strongest preference by far is for the Government of Canada to negotiate to avoid the imposition of tariffs altogether.  There was no discussion of what bargaining chips should be put on the table beyond those already contemplated, such is beefed-up border security. 

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Members were less unified on the question of whether (if pushed) Canada should impose tariffs of its own.  About 70% of members supported some sort of retaliatory tariff but another 20% were strongly opposed to such measures. 

A fuller report of results can be found HERE. 

On January 16th a member forum was held with members to discuss these findings and to help HRAI to develop an appropriate position. Based on the guidance from members, HRAI developed a position statement that urged the government to “take a thoughtful approach in any discussions with our friends south of the border.”  While the preference is to negotiate to avoid tariffs, HRAI will suggest that Canadian imposed tariffs should exempt the products of the HVACR sector due to their essential nature. 

HRAI’s two recommendations for government are to:  

  1. Negotiate vigorously and creatively to avert tariffs altogether.  Like many other sectors, our industry has pushed for years to maintain healthy cross-border trade with minimal restrictions and well-aligned regulatory regimes. Our industry believes this approach should be maintained to ensure the continued mutual benefits that flow from this historic relationship. 

  1. If retaliatory measures are contemplated, we urge the Government of Canada to exempt the products of our sector due to their essential nature. 

The position statement and recommendations were endorsed by the HRAI Policies and Priorities Committee on January 21st and by the HRAI Board of Directors on January 24th 

Click HERE for a copy of the Communiqué

HRAI will be announcing this position at a press conference in Ottawa on January 30th and that communique will be shared with federal and provincial government leaders. 

For more information, contact Martin Luymes at 1-800-267-2231 ext. 235 or email Marin (mluymes@hrai.ca). 


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