Canada took aim at the U.S. economy on Wednesday, hitting back with counter tariffs on U.S. products in retaliation to the 25 per cent tariffs on Canadian steel and aluminum imports levied by the U.S. the day before and as the trade war intensifies, David Rosenberg, founder and president of Rosenberg Research, says Canada’s response to the imposed tariffs was inadequate.
David Rosenberg joined BNN Bloomberg on Thursday saying he is “very disappointed” with Canada’s retaliatory tariffs against the U.S., and suggested a selective export tax or even export bans on items that are critical to the U.S. industry might have been a better response.
“When the bully in the schoolyard punches you in the eye, you don’t punch back, you go burn down their house.”
He added that Doug Ford was on the right track with the electricity export tax before pulling back after speaking with the White House.
“You can’t believe a word the White House is saying… I don’t believe we should be negotiating with the White House.”
Rosenberg added that putting retaliatory tariffs on U.S. products will only make things harder for Canadian consumers at a time when the job market is already under pressure.
“Last thing consumers need is having a squeeze on their incomes from tariff action.”
Beyond tariffs, U.S. President Donald Trump has also made comments that have many Canadians, including politicians fuming, such as reiterating his desire to annex Canada as the U.S.’s “51st state.”
In response to the comments, Rosenberg simply suggests Ottawa should “really just stop talking about Donald Trump”.
Instead, Rosenberg suggests the Feds start looking into an actual fiscal strategy that includes big tax cuts and perhaps even consider eliminating the capital gains tax rather than more spending.
“We need to get aggressive; we need to bring our corporate tax rates not to U.S. levels but below U.S. levels,” said Rosenberg.
Rosenberg added that Americans are not prepared for “pain,” noting Donald Trump “will dig his own hole” amid a trade war not only with Canada but other nations.
Furthermore, he says the Bank of Canada is better positioned to lower rates than the U.S. Federal Reserve.
“BoC needs to be cutting rates a lot more aggressively. [As Canadians] will need the interest rate relief and a weaker loonie.”
Rosenberg also suggested that the Federal government should start looking into measures to be less dependent on the U.S.
