Canadian Economy Braces for Prolonged Trade War Under New Tariffs
The Canadian economy is bracing for a prolonged trade war as U.S. tariffs sink in. Political science associate professor Aaron Ettinger of Carleton University says, 'I don't see this changing any time soon.' Trump's new 50% tariffs took effect over the weekend after Canada walked away from negotiations.
Industry Minister Mélanie Joly announced additional financial support measures for small businesses in the wake of these new tariffs. Some of these measures will be available even after Trump leaves office, including $500 million to support interest-free loans between $250,000 and $5 million with no repayment required for 36 months.
Ettinger notes that 'most of the tariffs that Trump has put in place over the last six or 12 months mostly have a legal foundation and a foundation in laws passed by Congress.' This means even if the Republican Party loses control, Trump may still be able to maintain most of the current tariff policies.
A new president could theoretically do away with Trump's tariff policies relatively quickly, but unravelling how those policies will have become rooted in the economy over several years could take much longer. Businesses on both sides of the border have already adapted to the tariff system and reversing that all at once is unrealistic.