Canadian businesses are assessing the impact of new U.S. tariffs, with negotiators back home and tariffs now at 50 percent. Business leaders exporting goods like plywood and wine expect these tariffs to sever ties with the U.S. economy. The tariffs cover around $28 billion in Canadian exports to the U.S., making up 5 percent of total exports. BMO’s Robert Kavcic estimates the tariffs could reduce Canada’s GDP growth by half a percentage point, hindering business investments for economic expansion.
Certain industries will bear the brunt of these tariffs, especially electronics and electrical equipment producers, followed by plastics, furniture, and industrial machinery manufacturers. Ontario, Quebec, and British Columbia are most exposed to these tariffs, affecting their manufacturing sectors significantly. Smaller businesses exporting consumer goods like honey and candles face heightened challenges due to the tariffs, impacting their competitiveness and revenue.
The University of Calgary’s Trevor Tombe predicts tens of thousands of job losses across sectors directly and indirectly affected by the tariffs. Sectors supporting tariff-affected industries, such as trucking and bookkeeping services, also face job cuts. The uncertainty stemming from the tariffs and potential retaliatory measures poses a nationwide risk, slowing down economic growth more than the tariffs themselves. The failure of trade talks has cast doubt on the future of the Canada-U.S.-Mexico Agreement, with potential long-term implications for job losses and economic setbacks.