US Tariff Threat to Hit Canadian Economy Hard: Experts Warn

Canadian economy may face ripple effects from US tariff threat

The US has threatened to impose 50% tariffs on a wide range of Canadian goods, including honey, liquor, cement, dairy products, and more. The new tariffs are set to take effect on August 19th and could impact around $28 billion worth of annual exports to the US, or about 5% of what the US imports from Canada.

Experts warn that this could shave two to three tenths of a percent off growth in 2026 and 2027 in Canada. Randall Bartlett, deputy chief economist with Desjardins, said it could suppress hiring and weigh on consumer activity and residential investment.

Fen Osler Hampson, a professor at Carleton University, suggested that the tariffs may be a negotiation tactic by the US administration. However, Canadian trade negotiators should still be cautious moving forward, as the tariffs could reflect the tense relationship between Trump and Canadian Prime Minister Mark Carney.