According to experts, the ongoing trade conflict between Canada and the United States will result in increased expenses for consumers and businesses across various sectors such as cellphones, gaming consoles, and artificial intelligence infrastructure.
Last year, Canada exported over $4 billion US worth of electronic equipment to the U.S., which is now subject to the new 50 per cent tariffs imposed by U.S. President Donald Trump. Notably, certain electrical boards and controllers constitute the highest export category impacted by these tariffs.
Prime Minister Mark Carney announced that Canada will reciprocate the U.S. tariffs dollar for dollar.
Industry professionals anticipate inevitable price hikes as the trade tensions pose risks to businesses on both sides of the border.
Carol McGlogan, the President and CEO of Electro-Federation Canada, expressed concern over the devastating impact of the 50 per cent tariffs. She highlighted that ninety percent of the exports from the organization go to the U.S., emphasizing that the increased pricing will affect various sectors such as homes, schools, and buildings.
McGlogan stated, “With the tariffs affecting both directions, the cost of expanding the electricity grid by 2050 will surge, burdening taxpayers.”
Similarly, Evan Light, an associate professor at the University of Toronto, pointed out that products like gaming consoles and cell phones have already been experiencing price increases due to chip shortages and supply chain challenges. He anticipates that the intensification of the trade war between Canada and the U.S. will further escalate prices for these items.
Andrew Bell, the Chief Product Officer at Ottawa-based Kinaxis, mentioned that many clients are exploring new suppliers using the company’s software to mitigate the effects of tariffs on their supply chains. Bell emphasized that the increased costs resulting from the tariffs will eventually impact the end consumer.
Impact on AI Adoption
Bloomberg News recently reported that Nvidia, a leading technology company, has informed customers about potential price hikes of up to 15 per cent for its artificial intelligence chips.
Bell highlighted that challenges in the supply chain, including tariffs, can lead to higher costs for components, affecting companies like Nvidia. He noted that this could potentially slow down the adoption and deployment of artificial intelligence technologies.
Professor Light raised concerns about the escalating prices impacting AI adoption, suggesting that the increased expenses in both the U.S. and Canada might prompt a reevaluation of investments in the AI sector.