Canada-US Trade Tensions Escalate as Investor Confidence Plummets

As the August 19 deadline for Canada-US trade negotiations looms, Canadian investor confidence is waning due to President Trump's tariffs on a range of goods.

New polling from the Angus Reid Institute shows that only 43% of Canadians believe Prime Minister Mark Carney can deliver a good deal, down from 51% in April. This lack of trust has significant implications for markets, with political uncertainty around trade outcomes historically weighing on the Canadian dollar and suppressing business investment.

One-in-four Canadians cites the unpredictability of the Trump administration as the reason they have no confidence a deal can be struck. The situation grew more unpredictable still as Trump threatened yet another round of tariffs over Canadian wildfire smoke drifting into US states.

The economic dimension is equally important, with researchers at the Federal Reserve Bank of New York finding that Americans bear approximately 90% of the cost of comprehensive tariffs. This dynamic suggests the tariff regime may be structurally unstable and vulnerable to both legal challenge and domestic U.S. economic pressure.