Experts predict that the ongoing trade dispute between Canada and the United States will lead to increased costs for consumers and businesses, affecting a wide range of products from electronics to artificial intelligence infrastructure.
Last year, Canada exported over $4 billion US worth of electronics equipment to the U.S., which will now face the new 50 per cent tariffs imposed by President Donald Trump. Among the goods targeted by these tariffs, certain electrical boards and controllers stand out as the most significant in terms of export value.
Prime Minister Mark Carney announced that Canada plans to retaliate against the U.S. tariffs by imposing equivalent tariffs.
According to industry experts, the escalating trade tensions are likely to result in higher prices, posing a threat to businesses on both sides of the border.
Carol McGlogan, the president and CEO of Electro-Federation Canada, representing over 230 companies in Canada’s electrical and automation sector, expressed concern over the impact of the 50 per cent tariffs, labeling them as devastating. She highlighted that 90 per cent of the exported goods from Electro-Federation Canada go to the U.S., emphasizing that price hikes will affect various sectors such as homes, schools, and buildings.
McGlogan pointed out that the anticipated increase in electricity grid expansion costs by 2050 will be further burdened by the tariffs, ultimately impacting taxpayers.
Evan Light, an associate professor at the University of Toronto, noted that products like gaming consoles and cell phones have already been experiencing price hikes due to chip shortages and supply chain challenges. He suggested that the current escalation in the trade war between Canada and the U.S. will further elevate the prices of these items.
Andrew Bell, the chief product officer at Ottawa-based Kinaxis, mentioned that many clients are utilizing the company’s software to assess new suppliers in response to the tariffs. Bell emphasized that while the tariffs may initially affect supply chains, the end consumers will bear the cost through increased product prices.
Impact on AI Adoption
Bloomberg News reported that Nvidia, a leading company, warned customers about potential price hikes of up to 15 per cent for its artificial intelligence chips due to supply chain challenges. Bell highlighted that such challenges, including tariffs, result in higher component costs, affecting companies like Nvidia.
Professor Light raised concerns about the impact of rising prices on AI adoption and deployment, questioning whether the increased expenses in both the U.S. and Canada could potentially slow down the growth of AI technology.