Tariffs Won't Dent Canada's Near-Term Growth, Economists Say

Economists predict that new U.S. tariffs and trade restrictions on Canadian goods will not significantly impact Canadian economic growth in the near term.

However, they warn that the latest escalation raises the risk of a prolonged trade conflict, adding uncertainty for Canadian businesses and increasing the odds that the economy could stall or shrink in the fourth quarter.

A TD Economics client note states that the U.S. response to Ottawa's counter-tariffs was threefold: stopping imports of some products, removing tariffs on others, and introducing new tariffs on still more.

The shift in tariff focus is expected to have little material impact on domestic growth in the near term but represents 'another manifestation of policy uncertainty' that reinforces concerns about U.S. market access and weighs on Canadian firms.