Canada Braces for Economic Fallout as US Tariffs Bite

Canada is bracing for economic fallout as US President Donald Trump's new 50% tariffs on Canadian imports deepen the trade war. The tariffs, imposed under the 1930 Tariff Act, target hundreds of Canadian items including furniture, plastics, plywood, and electrical equipment.

The University of Calgary economics professor Trevor Tombe estimates that up to 90,000 jobs may be lost if the new tariffs persist, about 0.4% of Canada's labor force. The Canadian dollar fell sharply against the US dollar when Asia trading opened on Monday.

Canadian Prime Minister Mark Carney has vowed retaliation with counter-tariffs on $20 billion worth of US steel, dairy, appliances, electronics, and other products starting September 8. He acknowledged that the trade war will hurt the economy but emphasized Canada didn't start it.

Critical provinces such as British Columbia, Ontario, and Quebec are particularly exposed to the new tariffs. Economists warn of a 'substantial' fallout that could carve another 0.2-0.3 percentage points from Canada's growth rate this year and next.