Escalating tariff war will push Canada's economy into recession, economists warn
Canada's economy will face the most severe shock since the Covid-19 pandemic and will probably sink into a recession if tariff war persists, say top economists
Escalating tariff war will push Canada's economy into recession, economists warnCanada's economy will face the most severe shock since the Covid-19 pandemic and will probably sink into a recession if tariff war persists, say top economistsThe Canadian economy is set to face the most severe shock since the Covid-19 pandemic and will probably sink into a recession if a tariff war persists,
say top economists, with one calling it an “existential threat.”President Donald Trump’s 25% tariffs on most goods the US buys from Canada and Prime Minister Justin Trudeau’s plan to retaliate on C$155 billion ($105 billion) worth of American-made products will trim real gross domestic product growth by 2 to 4 percentage points, according to economists’ estimates.
Escalating tariff war will push Canada's economy into recession, economists
Canada's economy will face the most severe shock since the Covid-19 pandemic and will probably sink into a recession if tariff war persists, say top economists
The Canadian economy is set to face the most severe shock since the Covid-19 pandemic and will probably sink into a recession if a tariff war persists, say top economists, with one calling it an “existential threat.”
Canada's Prime Minister Justin Trudeau addresses media following the imposition of a raft of tariffs by US President Donald Trump against Canada, Mexico and China in Ottawa on
President Donald Trump’s 25% tariffs on most goods the US buys from Canada and Prime Minister Justin Trudeau’s plan to retaliate on C$155 billion ($105 billion) worth of American-made products will trim real gross domestic product growth by 2 to 4 percentage points, according to economists’ estimates.
For an economy that was projected to grow at 1.8% in 2025, that would imply the first annual contraction in 16 years, outside of the pandemic. Consumer prices are likely to increase at a faster pace than the Bank of Canada’s 2% target, the unemployment rate is expected to rise and the Canadian dollar will weaken further.
Here’s what economists are saying
Toronto-Dominion Bank
Chief Economist Beata Caranci and Senior Economist James Orlando expect a “sharp negative reaction” in North American equity markets and the loonie, which could drop as low as 65 US cents. The economy will probably go into recession if tariffs are sustained for five to six months. Any longer would deepen the contraction, and the unemployment rate may cross the 7% threshold. “It is premature to estimate the central bank response,” they said.
