Tariff threat on Canada brings uncertainty to Blaine

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Blaine businesses are in a waiting game to understand how they may be impacted if President Donald Trump follows through with a 25 percent tax on exports coming into the U.S. from Canada and Mexico, which could start as soon as Saturday, February 1. 

In just over a week since the President started his second term in office on January 20, he’s signed a barrage of executive orders and announced imposing tariffs with the U.S.’s two largest trading partners. Trump has previously said the tariffs are being used to get the countries to stop undocumented immigrants and fentanyl from entering the U.S.

Dennis Wilson, co-owner of Edge Logistics and Transport, wrote in an email to The Northern Light that both he and his Canadian customers didn’t know what would happen and were operating business as normal in the interim.

“Right now, our three warehouses are bulging at the seams with freight from our Canadian customers who want their goods into the states before the tariffs begin thus our warehouse people are extremely busy and our trucks are making double runs daily into Canada to meet the demand,” Wilson wrote. 

Kelle Hagen, co-owner of Hagen’s of Blaine, said she didn’t know yet if the tariffs would affect her shipping and mail service store, where 99 percent of the clientele are Canadians. The value of the Canadian dollar is Hagen’s biggest concern, she said, adding business hasn’t returned to the same levels before the U.S./Canada border closure during the Covid-19 pandemic. 

As of January 29, $1 CAD equaled $.69 USD, with Reuters reporting the Canadian dollar dipped .2 percent following the tariff threats and an anticipated interest rate cut in Canada. The value of the Canadian dollar reached its lowest rate since the start of the pandemic in March 2020. 

“It’s in the back of our mind,” Hagen said. “We just take it as it comes because there’s nothing we can do about it.”

Representatives of businesses operating in Blaine, including Nature’s Path, an organic cereal company with operations in B.C. and Blaine, and BidBuy Importers, an automobile importing company, said it was too soon to comment on the tariffs’ potential impact.

Meanwhile, Tyler Schroeder, the Port of Bellingham’s economic development director, said port staff were fielding calls from concerned business owners. One solution the port can offer some businesses is its authority to establish foreign trade zones in different areas in Whatcom County, Schroeder said.

Foreign trade zones are designated areas where duties can be exempt or be deferred, though benefits vary based on the operations. CBP supervises the zones, which have been used for large industrial users, such as bp Cherry Point and metal and electric vehicle manufacturers.

“The best opportunity would be to reach out to our office so we can hear from businesses about their specific operations,” Schroeder said. “We can help provide some resources about the types of foreign trade zones that would help provide some savings to their operations.”

Edward Alden, a senior fellow at the Council on Foreign Relations in Washington, D.C. and visiting professor at Western Washington University’s College of Business and Economics, said he believed the War of 1812 between Britain and the U.S. was the closest event to the planned tariffs in recent history. 

“This goes lightyears beyond anything that has happened in the relationship before, going back to the founding of Canada in 1867,” Alden said.

Alden said he believed Whatcom County would be most impacted by Canadians boycotting U.S. goods, just as they had when the tariffs were placed on steel and aluminum from 2018 to 2019.

“If the United States puts these tariffs on Canada, Canadians are going to be furious. They will see this as a fundamental betrayal of the economic relationship between the two countries,” Alden said. “I can guarantee you a lot of Canadians are going to say, ‘I am never again going to shop in the United States … I will not do anything that supports a country that has declared economic war on Canada.’”

Researchers at Western Washington University’s Border Policy Research Institute (BPRI) also believe boycotting Canadians will have the greatest impact on border towns like Blaine. 

“I think a lot of people are just waiting to see what happens,” said Jennifer Bettis, a BPRI researcher. “The reaction on what they do might be based on the level of severity of tariffs.”

Bettis said she’s been seeing Canadians misunderstand that tariffs won’t be imposed on purchases they make in the U.S. and believes this could stop some from shopping south of the border.

Uncertainty could cause industries that need to plan years in advance, such as the automotive industry, to invest in less volatile markets, Bettis said. It could also create more appeal for Canadian companies to relocate into the U.S.

“Whether or not the tariffs actually play out, the rhetoric itself is damaging,” said Laurie Trautman, director of BBPRI. There is business investment that has to halt. There’s a lot of uncertainty.”

After working in the cross-border transportation business for over 40 years, Wilson, of Edge Logistics, said he’d seen it all. 

“All kinds of bumps in the road, so to speak, and we have always come through,” Wilson said. “This will be no different.”

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