Trade War Threatens Canada's Economic Momentum

Canada and the US are locked in a trade war that is set to hurt both nations. However, Canada's smaller economy and reliance on its bilateral relationship with the US leave it more exposed to the economic pain.

According to David Doyle, head of economics at Macquarie Group, 'a trade war hurts both parties' but Canada will feel the greater toll due to the math involved. The country is dealing with an economy roughly 10-12 times its size, which limits its ability to withstand the impacts of a trade dispute.

Despite the dire situation, there are signs that negotiations may be on the mend. US Trade Representative Jamieson Greer and Canadian Minister Dominic LeBlanc have made public comments indicating some softening in tone. This is seen as a positive sign for potential future talks.