How tariffs on Chinese semiconductors, batteries could hit Canadian wallets

globalnews.ca:

Ottawa may not be done firing trade salvos at China as Finance Minister Chrystia Freeland said the federal government was considering further tariffs.

If consultations announced this week yield more trade actions, experts say Ottawa should watch out for consumer prices in the coming months.

“Tariffs will not necessarily mean a shortage. Users will need to be prepared to pay for the tariffs and then pass on the pricing increases to consumers. Not an ideal scenario, but still a plausible response,” said David Dienesch, CEO of Allianz Trade in Canada, an international group that offers trade insurance.

Last month, the federal government raised tariffs on Chinese EVs to 100 per cent and on Chinese steel and aluminum to 25 per cent.

Freeland told reporters at the Liberal caucus retreat in Nanaimo, B.C., on Tuesday that more could be in the works.

“I’m announcing a 30-day consultation on imports to Canada from China of batteries, battery parts, semiconductors, critical minerals and metals and solar products,” she said.

Semiconductors are used in a range of consumer products, from cars to cellphones.

The COVID-19 pandemic upended the global semiconductor supply chain and Canada, too, was affected, with supply shortages and higher prices on things like vehicles and appliances.

Dienesch said there might be some supply chain disruptions in the short term in both the automobile and telecom markets if tariffs are applied on Chinese semiconductors.

“China is one of the world’s largest semiconductor producers. We saw the impact of semiconductor shortages during COVID. The auto sector is a significant user of semiconductors, so we can anticipate some short-term negative supply chain impacts as manufacturers adjust to new pricing and