Quote:
Originally Posted by edslunch
I fully expect him to redefine the definition of tariff to mean other countries must pay it as a fee for access to the US market. I'm guessing that's not allowed by international law but that wouldn't stop him.
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It wouldn't matter. What matters are the INCO terms the two parties have agreed to. Often written right into Purchase Orders, or contract agreements.
If the agreed upon term is DDP for instance (delivered duty paid) then the exporter is on the hook for all fees and taxes. In this instance, the exporter (Canadian company) would be tagged with the 25% tariff by their customs brokerage company, who would then pay the US federal government.
The exporter can choose to absorb the tariff or a portion of it, or they can pass it along to their customer in the US via unit price increase, surcharge or fee, etc.
Most Canadian exporters will almost certainly pass the cost along, which will prompt US companies to seek local supply. Often times, the reason they are buying from Canada is there is no supply of said product locally, i.e.: Canadian crude or Toyota RAV4s. Our economies have been growing more and more intertwined since 1945 so many US companies will have no choice but to pay the tariff their Canadian suppliers pass along to them.
Make no mistake though, many Canadian business will lose market share to American companies, and our economy will suffer. But in the States, prices for every good and commodity will increase, whether it's imported or not because domestic companies will have the freedom to match the pricing of their now tarriffed Canadian and offshore competitors.