How Donald Trump's tariff war could hit Canadians' wallets

financialpost.com:

“A tariff is essentially a tax that you put on goods and services that you import from another country,” said Fen Osler Hampson, professor of international affairs at Carleton University and co-chair of the Expert Group on Canada-U.S. Relations.  

Tariffs are paid by the importer, not the exporter. For instance, if the U.S. puts a tariff on Canadian goods, the American company or individual that imports our goods must pay the fee to the U.S. government. So for the importer, a 25 per cent tariff has an effect similar to a 25 per cent price increase. Because it must now pay more overall to buy the Canadian goods, the company might try to negotiate a cheaper price or it might be forced to look for alternatives outside of Canada instead. In either case, it will usually be paying more than before, and that cost will ultimately be passed along to consumers.

Traditionally, tariffs have been used to protect a country’s industries at risk of going out of business or having trouble competing with producers from other countries, Hampson said. Tariffs can also be used to gain leverage during trade negotiations, or as a way to generate revenue for governments, though that revenue comes at a cost.

“It’s obviously inefficient in an economic sense, because it’s raising the price of goods and services, as any tax will do,” Hampson said, comparing tariffs to a goods and services tax (GST) at the border .  

Although Trump has said the foreign country is the one that ultimately pays for tariffs that the United States imposes on its goods, the reality is it would be American importers, with collateral damage for businesses and consumers.

Michael McAdoo, partner and director at Boston Consulting Group (BCG) Montreal, offered the example of