Listeners, today’s Canada Tariff News and Tracker brings you the latest updates on how US tariffs—driven by President Trump’s policies—continue to reshape cross-border trade, business costs, and economic growth in Canada.
Export Development Canada’s latest quarterly report blames Trump’s tariffs for pushing the Canadian economy into a technical recession for 2025. Canada’s GDP growth is forecast at a tepid 0.9%, trailing the US’s 1.7%. Unemployment has risen to 7.1%, and business investment remains weak, especially in machinery and equipment, as trade tensions hit exports and confidence. Lumber, steel, aluminum, motor vehicles, and parts are the sectors most exposed, with non-USMCA-compliant exports facing a staggering 35% tariff—a direct hit to Canada’s key manufacturing and resource industries.
S&P Global estimates that global tariff costs will reach $1.2 trillion in 2025, two-thirds of which are being passed on to consumers. That’s a massive burden for everyday Canadians, who are seeing costs for goods rise. The tariff calculus isn’t confined to finished products. In Canada’s modern supply chains, components are often shipped across borders multiple times before reaching the final buyer, compounding tariff costs at every crossing. Industry analysts estimate that the cumulative result could add $5,000 to $12,000 annually for the average North American consumer.
Mark Carney, in a recent interview, emphasized that while about 85% of Canada’s trade with the US remains tariff-free, the average US tariff rate facing Canadian exporters is now 5.5%. That rate is the lowest of any US trading partner, but it’s no comfort for steel, autos, aluminum, and forestry industries—core pillars of Canada’s export economy—still in the crosshairs of targeted tariffs. Carney points out the deep integration of Canada’s and US automotive sectors, noting that US content in Canadian vehicles often exceeds the US content in cars produced domestically in America. He argues that both economies prosper from their tight linkages and that disruption is damaging to US competitiveness as well.
The automotive sector faces fresh pressure: starting November 1st, the US will apply a 25% tariff on imported medium- and heavy-duty trucks, further complicating manufacturing and supply chain decisions for Canadian companies. According to CarPro, industry leaders expect significant increases in costs and delays for vehicles imported into the US from Canada and Mexico.
Bank of Canada Governor Tiff Macklem stated that one in four Canadian jobs depends on US exports. He expects only soft economic growth in the second half of 2025, with uncertainty clouding investment and jobs. Despite a policy rate cut to 2.5% in September, the economy contracted by 1.6% in Q2.
As businesses scramble to adapt, many are shifting distribution hubs to Canada and adopting new warehousing strategies to minimize border crossings and unpredictable delays. Nearshoring is emerging as the most practical solution for mid-sized manufacturers unable to bring production back to the US.
Listeners, these developments underscore how tariffs are more than price changes—they’re fundamentally reshaping Canadian business and affecting every household in tangible ways. Be sure to subscribe so you don’t miss the next update on Canada’s evolving trade landscape.
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