Exporters in Canada are scrambling to avoid a potential 10 percent import tax promised by new U.S. President Donald Trump.
In evaluating options, some are even considering moving production or supply lines south of the Canada border into the United States.
Amid warnings from the Bank of Canada last week protectionist policies brought in by Trump could drive companies to invest in the U.S. rather than Canada, executives told Reuters their search for options has already begun.
National Bank Financial estimated a 10 percent border tax could cause Canada’s total exports to the U.S. to drop by about nine percent, with non-petroleum goods sinking almost 11 percent.
Exports are expected to drive about a third of Canada’s economic growth in 2017, behind only consumption and government spending.
President Trump has spoken to Canada’s Pemiere, Justin Trudeau, in an effort to satisfy both countries without imposing tariffs on imports.
However, Trump continues to threaten to scrap the North American Free Trade Agreement. Consultations with Mexico are also ongoing.