The latest move from the White House in the ongoing trade conflict between Canada and the U.S. involves a complete ban on Canadian imports of dairy, motorcycles, and certain alcohol products. In addition to these bans, new 50 per cent tariffs have been imposed on a range of other goods. Economists have assessed the potential impact of these measures on the Canadian economy.
While some industries may be affected, economists suggest that the overall impact on the Canadian economy may not be significant. According to analysis by Derek Holt of Scotiabank, the new tariffs will apply to approximately $3 billion worth of Canadian goods, while removed tariffs amount to around $2 billion. This difference is relatively small considering that Canada exported over $527 billion worth of goods to the U.S. in 2025.
The bans on alcohol, dairy, and motorcycles are expected to have minimal effects, as Canada’s exports in these categories are relatively low. Alcohol exports, valued at $550 million last year, would only be impacted by $700 million worth of export bans. The U.S. administration’s actions are viewed by Holt as more of a symbolic gesture than a substantive economic move.
Chief economist Doug Porter of BMO also concurs that the impact of the new tariffs may be limited, with the total value of newly tariffed and removed items at approximately $2 billion each. However, certain industries and regions may still feel the negative effects of the tariffs, affecting business owners.
The escalation in trade tensions comes amidst other economic risks, such as the rising cost of oil due to geopolitical tensions in the Middle East. This poses a potentially greater risk to the economy than the new U.S. trade measures, according to analysts.
While the direct economic impact of the tariffs may be manageable, the indirect effects on business confidence and uncertainty are concerning. The swift implementation of some of the new measures leaves businesses on both sides of the border with less time to adapt, potentially leading to further challenges for affected industries.