With most of Canada’s retaliatory tariffs on goods from the United States set to be removed on Sept. 1, many Canadians may be hoping for some relief on prices that went up as a result of the measures.
But experts are cautioning that the impact may not be instant.
“It’s certainly welcome news. For us, the retailers and the retail industry, and by extension, the Canadian consumer who’s been seeing the cost of this tariff war over the last few months,” said Matt Poirier, vice-president of the Retail Council of Canada.
In theory, removing counter-tariffs should mean that prices that increased due to tariffs will begin to climb down, he said.
“The question is, how long will that take? It’s complicated, and it’s going to depend on the good itself,” Poirier said.
How soon a product comes down in price — and whether it will at all — depends on several factors.
“If they (retailers) had to buy goods during the tariff period at a higher price, then they’re going to have to pass that through until they can start buying those goods again at the lower price,” he said.
With most grocery products being perishable and harder to stock, experts say the first place Canadians can see prices come down could be in the produce aisle.
“It is going to have an impact on food prices, but it’s going to have an impact on very specific food prices,” said Mike von Massow, food economist at the University of Guelph.
However, he said any drop in prices may not be very significant.
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“The tariffs were selected quite carefully to minimize the impact on Canadian consumers. That means that when they’re removed, there won’t be a significant impact on Canadian consumers on the reverse side of it,” he said.
One of the first products that Canadians could see get cheaper is Florida orange juice.
“Those prices should come down relatively quickly because orange juice is a perishable product,” von Massow said.
Other products with longer shelf life, such as American pickles or sugar, will take a lot longer to get cheaper, he said.
“We put tariffs on U.S. sugar, so we should see the prices of those sugar products, like candy, that contain sugar that went up in price come down. Those will probably come down a little less quickly than orange juice, because it’s not a perishable product,” von Massow said.
Canada’s major grocers are expecting food prices to start decreasing in the coming days, but warn that it may take longer than some want.
“In the days ahead, the price of goods in all grocery stores impacted by tariffs will start to come down. Prices will come down over time, as we sell-through inventory that was purchased based on tariffed pricing,” Loblaw said in a statement on its website.
The big-box grocer uses a ‘T’ symbol on its shelves to indicate whether a product’s price has been affected by Canadian tariffs on U.S. goods. Loblaw said the symbol “will remain as long as the price of that item is impacted (by) tariffs.”
The grocer will also continue marking Canadian-produced goods with a maple leaf symbol.
“Grocers have gotten a lot of heat in the last four years about what’s happened with food prices. I think they’re trying to get ahead of the story and say, here’s what’s going to happen. Yes, we’ve got prices coming down, but it might take a little bit for the inventory to come through,” von Massow said.
Other goods, such as electronics, stationery, sporting goods and apparel, will take several weeks, if not months, to become cheaper, Poirier said.
“It’s going to be hard because a lot of those purchases have already been made (by retailers),” he said.
“It’ll depend on the good. It could be as soon as in the next few days or weeks, and it might be still months out. It’ll all depend on that good and those supply chains,” he said, adding that the more complex a supply chain, the more time it’ll take to get cheaper.
One such product is coffee, von Massow said. If U.S. tariffs on Brazil end up raising coffee prices for Americans, it could have a ripple effect on Canadians.
“The U.S. doesn’t produce any coffee but some of our smaller roasters are buying through U. S. brokers. Inventory could make some difference depending on how much Canadian roasters have on hand,” he said.
Canadian duties on U.S. steel, aluminum and automobiles remain in place, with car prices expected to remain elevated. The cost of used cars, too, is expected to rise.
According to a monthly car pricing report by used car trade platform Clutch, the average used vehicle in Canada now costs $33,614, nearly six per cent more than this time last year, with trucks seeing the sharpest squeeze, as only 16 per cent remain under $30,000.
“With auto tariffs still in place, those price pressures are unlikely to ease,” Clutch said in a statement.
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