The Engineer: With tariffs, nobody wins
Not once has the imposition of a government tariff ever led to lower costs for consumers.
September 24, 2018 By David Heska P.Eng.
While we all enjoyed some time off this summer, others were contemplating the current predicament we find ourselves in because of the short-sighted decisions made south of the border.
On May 31, President Trump decided to impose tariffs on imports of certain steel and aluminum products from Canada at the rates of 25 and 10 per cent, respectively. Not to be outdone, our government responded on July 1 with similar tariffs.
Let me be clear: tariffs are a bad idea. In the globalized society in which we live, imposing penalties on a critical trade partner is just plain stupid. Many voices – such as Fenestration Canada, the Canadian Manufacturers and Exporters and the U.S. Window and Door Manufactures Association – have expressed their displeasure with the tariffs. It’s disappointing that after many years of successful trade and collaboration across the border a decision by one administration can overturn decades of achievement.
Who are the winners and losers in this current trade war? From the rhetoric we hear on the news and read in our Twitter feeds, a small number of leaders in the U.S.A. seem to think they have the upper hand. But in reality, there are no winners. Tariffs only increase the cost of goods sold. Not once has the imposition of a government tariff ever lead to lower costs for consumers. Therefore, it is the consumers who will suffer most in all of this.They will feel the pressure of rising window and door prices in both Canada and the U.S.
Here in the glass industry we also have our own stories to tell of the ways in which the tariffs are impacting our companies and projects. My team has already had some projects postponed and others re-tendered when the products we had specified (that were not 100 per cent “made in Canada”) were proving impossible to source in the required timeline for the original budget. In these situations, we had to communicate the cause of increased cost and schedule delay to the owner. The reason was clear but that did not make it any easier for the client paying the bill to swallow (especially when the project cost was increased by $500,000).
So where do we go from here? I encourage each of you to reach out to your local Member of Parliament and inform them of the impact these tariffs are having on our industry. In addition to speaking to our elected officials we should be continuing our industry dialogue. How have these tariffs impacted you? Is there anything that your company has been able to do to minimize their impact? I look forward to hearing from you and engaging in discussion at the upcoming WinDoor show in Quebec City at the start of December. This may all be settled by then, but either way our industry has much to discuss.
Finally, I would encourage everyone to be patient. Change will come. Remember that in 2002 President George W. Bush imposed tariffs on steel hoping to revive steel production in the U.S. Instead of reviving the industry, the opposite occurred with job losses, material shortages and increased costs. Then, in 2003, the tariffs were reversed. Our tariff issue today will pass over like a storm cloud as well. Have faith that our elected officials will make the right decisions and that the excessive nationalistic zeal of a few will be overcome.
David Heska, P.Eng. is a director with WSP’s building sciences team in southwestern Ontario. He oversees the operation of the Hamilton, Kitchener and Windsor offices. David has been involved on window simulation projects as well as the design and replacement of windows in commercial and residential buildings. He can be reached at David.Heska@wsp.com
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