Donald Trump’s victory sparks concerns over ripple effect on Canadian economy
With over 77 percent of Canadian exports heading to the U.S., any shift in U.S. trade policy could significantly impact Canada’s economy.
As Canadians wake up to news of Donald Trump's return to the White House, concerns are rising about how his protectionist policies could impact Canada-U.S. economic ties.
Canadian business leaders are especially alarmed by Trump’s pledge to impose a universal 10 percent tariff on all U.S. imports, a figure he has hinted could be even higher in some speeches.
He also plans to reinstate a 2020 executive order that mandates the Food and Drug Administration to purchase “essential” medications exclusively from U.S. manufacturers and to restrict Chinese investments in critical U.S. infrastructure.
According to a report from the Canadian Chamber of Commerce, such tariffs could shrink Canada’s economy, imposing economic costs of approximately $30 billion per year. U.S. economists warn that Trump's tariff plan could drive inflation and potentially trigger a recession, likely affecting Canada as well, given the deep economic connections between the two countries.
With over 77 percent of Canadian exports heading to the U.S., any shift in U.S. trade policy could significantly impact Canada’s economy.
The Toronto Region Board of Trade notes that since the Canada-United States-Mexico Agreement (CUSMA) took effect in 2020, Canada-U.S. trade has grown by 46 percent.
However, CUSMA will be up for review in 2026, creating uncertainty about the future of trade relations.
