US Tariffs Hit Canadians: Economists Predict Minimal Impact

A recent trade move by the United States has sparked concerns about its impact on Canada's economy. Starting September 15, the U.S. is imposing new tariffs of 50% on Canadian goods such as dairy, alcohol, metal and paper products, and outboard motors. Meanwhile, it has removed tariffs on cement, sugars, toilet paper, and fishing rods.

Economists from TD Economics and Capital Economics agree that the changes will have little effect on Canada's national GDP growth in the near term. According to Andrew Hencic, senior economist at TD Economics, the U.S. 'shifted what is covered by the tariff umbrella but has landed on a similar dollar amount that will be tariffed.'

The real damage, however, lies in the uncertainty caused by these changes. Hencic notes that policy uncertainty can have its own costs, even when the total tariff amount remains flat.

Provinces such as Ontario, Quebec, New Brunswick, and Nova Scotia are expected to feel the brunt of the new tariffs, while British Columbia is likely to remain relatively unaffected.