Effect of steel tariffs could be felt in Sask. in as soon as two weeks: expert

Effect of steel tariffs could be felt in Sask. in as soon as two weeks: expert

A University of Toronto research fellow says there is a possibility steel workers will be laid off because of the tariffs placed on steel and aluminum by the United States at the end of May. 

"In the short term, you have a prospect of layoffs because we export 45 per cent or so of our product to the States," said Peter Warrian. 

He said such layoffs could happen within two to six weeks.

"Steel is basically ordered on a six-week cycle, so we're going to see reverberations within six weeks."

Warrian also said that if there's fewer exports from the States coming into Canada and vice versa then there is a possibility to open up to other markets Canada previously didn't trade with as much, but it would take time. 

"You can't turn steel mills on a dime. You can't do it with the click of a mouse. That's a three to five-year proposition," he said. 

"What do workers do in between?"

Actions have consequences: prof

When trade is restricted, demand can go down and prices can spike, creating conditions favourable to layoffs. Jason Childs, associate professor of economics at the University of Regina, said it's possible we will now see the effects of President Donald Trump's actions here in Canada. 

"It's going to hit steel and aluminum producers, it's going to hit manufacturers because a lot of that steel goes into manufacturing products here is coming across the border from the U.S. and if we slap retaliatory tariffs on, all that stuff gets more expensive," Childs said. 

"When you see a trade war like this, prices tend to rise, rising prices reduces demand and then you don't need as many workers."

Over the long term, Childs said the effects of the tariffs will be inflationary. 

"It's going to raise the price of a lot of manufactured products that we buy from the U.S.," he said.  

Childs said that the trade war isn't positive for anyone, especially not Saskatchewan. 

"It's really important to keep in mind that Saskatchewan is an [exporting] economy. It's kinda what we do. And if we lose or get cut off from our major markets, the U.S. being probably the biggest of them, then we're going to hurt."