Forbes chairman Steve Forbes issued a warning Monday regarding President Donald Trump's escalating trade dispute with Canada, cautioning that the imposed tariffs could negatively impact economic growth and investment.
Speaking on Fox Business, Forbes, a vocal supporter of Trump, expressed concern after last-ditch trade negotiations collapsed, leading Trump to announce 50% tariffs on approximately $20 billion worth of Canadian goods. Trump accused Canada of "ripping off" the U.S. and stated, "WE DON’T NEED CANADA."
Forbes countered that the trade deficit is largely influenced by heavy oil exports from Canada to U.S. refineries, which cannot process other crude types. He suggested that excluding this critical crude component reveals a trade surplus with Canada, arguing that such tariffs are essentially taxes that will likely result in "less economic activity" rather than reviving U.S. manufacturing.
"And so you take out that critical crude, we actually have a surplus with Canada for those that take trade deficits and surpluses so seriously," Forbes stated. "So I think they’re going to find a way to tamp this thing down, but these threats just create uncertainty."
Canada responded to the U.S. tariffs by announcing its own retaliatory tariffs on $20 billion worth of American goods, scheduled to take effect on September 8.
Former economic adviser Stephen Moore also voiced criticism, questioning the timing of a trade war with Canada given current rising commodity prices in the U.S., which he indicated could be a sign of increasing inflation.
Forbes emphasized that "tariff is just another word for tax" and that Republicans should understand that imposing additional taxes on products will not achieve the desired revival of U.S. manufacturing but will instead stifle economic activity.