How damaging will the tariffs be?
The breakdown of trade negotiations between the US and Canada at the weekend caused the Trump administration to introduce 50% tariffs on a broad range of Canadian imports including dairy products, alcoholic beverages, building materials, consumer goods, and industrial and personal items.
Still, experts aren’t yet sounding the alarm about a possible huge shock to the Canadian economy. Servus chief economist Charles St-Arnaud (pictured below) said the latest measures are still less menacing than the huge blanket levies threatened by Trump at the beginning of last year.
“The hit is not going to be that big. It’s only 5% of our exports,” he told CMP. “There’ll be some headwinds for the labour market, probably some job losses, but I don’t think it’s going to be as bad as what we had in 2025 with the initial wave.
“I think the question is really: Where do we go from here? We’re back in uncertainty for businesses, uncertainty for households. We have the counter-tariffs that are going to have some impact, mostly on inflation. So how bad does it get? It’s clear it’s going to be a headwind on the Canadian economy in the short term.”
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