What Donald Trump’s plan for heavy tariffs means for Maine-Canada trade

By Billy Kobin, Bangor Daily News Staff

President-elect Donald Trump fleshed out his campaign vows with his Monday announcement of a plan to place 25 percent tariffs on goods from Canada and Mexico, affecting everything from logging to energy in Maine given Canada is its dominant trading partner.

Trump wrote on social media he will issue an executive order to make the new tariffs take effect Jan. 20, the day of his inauguration. Imports from China would also face a new 10 percent tariff, Trump wrote, saying the new rates for the three countries will remain in effect “until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”

Canada’s inclusion in the tariffs, along with previous examples of harm to lobstermen and wild blueberry farmers under Trump policies as well as expected retaliation from other countries, could harm Maine’s economy. However, heavy tariffs have played well here on the heels of mill closures, and Maine business leaders have long been expecting a tariff expansion.

Canada is far and away Maine’s top trade partner, with the northern neighbor accounting for 70 percent of Maine’s imports and 31 percent of its exports this August, according to state data. The state gets 3 percent of its imports from China.

Business leaders in Maine signaled Tuesday a desire to still wait to fully evaluate the potential consequences of Trump’s tariffs, which economists have cautioned will force companies to pass on higher costs to consumers at a time when Trump has promised to give families a break from inflation. But there is an appetite among certain Maine industries for what they view as fair policies.

“Our position on trade has always been that we want to see a level playing field,” said Dana Doran, executive director of the Professional Logging Contractors of the Northeast, whose group represents loggers and associated truckers in Maine.

Doran said the duties on Canadian softwood lumber from Trump’s first term were different than tariffs but played an equalizing role. Former Republican Gov. Paul LePage, a top Trump supporter in the state, opposed Trump’s softwood lumber policies when the two men overlapped in office, illustrating the complex nature of trade policy in Maine.

While Maine’s logging industry is not interested in paying more for products from foreign sources after years of higher inflation, Doran also said if “policy measures can lower the operational costs or incentivize more local markets, then we are open to consideration.”

Maine is also a trade gateway. Roughly $9.4 billion in trade from other states to Canada relied on infrastructure here, according to the Eastern Border Transportation Coalition. Maine Motor Transport Association CEO Brian Parke said he needs more time to digest how Trump’s move could affect truckers, but he said “strong trade” helps the economy.

Maine’s congressional delegation and state lawmakers have previously supported populist and protectionist trade policies instead of free trade deals, but a University of Maine professor and trade expert has noted how that conflicts with a desire for greater market access. Mineral fuels have been Maine’s biggest import and export with Canada, followed by seafood.

Trump and Canadian Prime Minister Justin Trudeau spoke over the phone Monday evening after Trump announced his tariff warning, with Trudeau describing it as a “good call.” 

Tension is still evident. Leaders of Canadian provinces requested an emergency meeting with Trudeau over the tariff proposal, while Canada’s Conservative Party leader said Trump issued an “unjustified threat” that requires a response “to put Canada first.”

Maine State Chamber of Commerce CEO Patrick Woodcock noted the Trump-Trudeau call in expressing optimism for “some stability” rather than trade battles that could affect a transnational energy market. There is no ignoring the “complicated and fully integrated” ties between Maine and Canada, he said, adding that “the last situation we want” is higher costs.

“We’re not just trading partners,” Woodcock said. “We really have fundamental infrastructure that doesn’t recognize borders.”