Now-delayed tariffs could threaten $14.3 billion in Pennsylvania sales to Canada – including $200 million of chocolate

HARRISBURG, Pa. (WHTM) — It won’t happen hours from now but could still happen a month from now.

And the United States does levy 25% tariffs on Canada — with Canada following through on retaliatory 25% tariffs — that could threaten $14.3 billion in annual exports (in 2023, the latest full year of statistics available) from Pennsylvania to Canada, which is by far the commonwealth’s biggest foreign trade partner. Mexico — also threatened by tariffs — is No. 2, at $5.4 billion, according to Office of the U.S. Trade Representative statistics.

At risk of consumer price increases would be $13.6 billion in imports from Canada. By that metric, Canada is No. 2 behind China, from which Pennsylvania imports $17.6 billion in goods annually.

Canadian statistics show Pennsylvania exports $1.3 billion in agricultural-related products to Canada each year, including — most relevant in central Pennsylvania — $200 million in chocolate.

Stephen Herzenberg, an economist and executive director of the center-left Keystone Research Center, said he doesn’t oppose tariffs in all cases — particularly if they might be necessary to help incubate a nascent industry.

“If it’s 1870 and England is sending you a lot of manufactured goods, and you use tariffs so that you can develop manufacturing in the U.S. that’s a standard long-term justification,” Herzenberg said. “But it’s hard to see what the overall strategy is with these tariffs. A lot of Canadian or Mexican production complements U.S. production or is fully integrated with U.S. production, so targeting those neighbors the most would be more disruptive and could increase the cost of cars and food.”

Herzenberg said the rather seamless integration of Pennsylvania steel into cars produced on both sides of the border dates dates to the 1965 “Auto Pact” between the two countries. He said the tariffs don’t reconcile with other Trump administration policies.

“Is Trump doubling down on helping U.S. companies become leaders in renewable energy, electric vehicles, high tech and artificial intelligence? No, he’s mostly doing the opposite. Is Trump protecting workers’ rights so that U.S. jobs created by tariffs pay well? No, he’s doing the opposite,” Herzenberg said.

The center-right Commonwealth Foundation, which describes itself as a free market think tank and has generally opposed tariffs more categorically than the Keystone Research Center but aligns with Republican politics in other realms, declined to comment Monday on Trump’s proposed tariffs.

“Free markets, free trade, shrink government, deregulate, cut spending,” Herzenberg said — his characterization of the Commonwealth Foundation’s usual position. “I think the cat’s got their tongue on this one because. They don’t know what to say.”

Republican legislators who have taken strong anti-tariff positions in the past have generally been muted on the question of the proposed tariffs.

Evans Candy of East Lampeter Township, Lancaster County, a family business dating to about 1976 (“about” because second-generation owner Steve Evans says it’s hard to say exactly when it transitioned from hobby to business), doesn’t count its sales among those $200 million in chocolate exports to Canada — it ships anywhere in the U.S. but doesn’t export. So the potential retaliatory tariffs by Canada on American exports don’t threaten Evans’s revenue.

But tariffs on China could raise the costs of shipping materials that come from there — baskets at Christmastime, especially. The impact of that?

“Sometimes as a business, we absorb a little bit of that, and then sometimes we just have to pass that along to the retail customer as well,” Evans said. “It depends on the degree.”

But Evans Candy has been through plenty of business cycles, and Steve Evans is sure that whatever happens with the proposed tariffs, this, too, shall pass.

“All kinds of ups and downs, and we always go through it and come out just fine,” Evans said. “Everybody loves their chocolate.”