Canada faces potential U.S. tariffs, economic downturn expected

As the deadline for new U.S. tariffs approaches, concerns are growing about Canada’s economy. President Trump’s month-long exemption for certain goods ends on April 2, and many economists believe significant tariffs will be imposed. There is skepticism about whether Canada can avoid these tariffs, which have already heavily impacted the country. Toronto Dominion Bank predicts that tariffs on Canadian exports to the U.S. could rise from the current 2.5% to an average of 12.5%. This rate is expected to last for six months before negotiations potentially lower it to around 5%. However, experts warn that trade relations may never return to what they were before Trump’s presidency. BMO Capital Markets forecasts that the 25% tariffs partially delayed until now will last for one year. This could lead to a contraction in Canada’s economy, with potential job losses exceeding 100,000 and an unemployment rate reaching 8% by the end of the year. The Canadian dollar is also expected to weaken against the U.S. dollar. While some economists hope for a more favorable outcome, many remain uncertain. Sentiment among Canadians has dropped to its lowest level in a long time, even lower than during the pandemic and the financial crisis. Concerns over job security and hesitance to make big purchases may lead to slower economic growth. Overall, the economic outlook is concerning, and remaining developments are closely watched. Experts are urging Canadians to pay attention to how these shifts may affect their financial decisions and long-term plans.