Corporate Canada and a wide range of sectors that drive the nation’s economy are voicing strong opposition to the tariffs announced by U.S. President Donald Trump. Industry leaders warn the measures will raise the cost of doing business, disrupt supply chains and increase prices for everyday consumers.
Canada response to the U.S. tariffs on Canadian goods
Organizations representing farmers, miners, homebuilders, restaurateurs and numerous other businesses spent Sunday denouncing the U.S. plan to impose 25% tariffs on many Canadian goods and 10% on energy products. Those U.S. duties are scheduled to take effect Tuesday, the same day Canada begins implementing its own retaliatory measures. Ottawa announced a first round of retaliatory tariffs targeting roughly $30 billion in U.S. goods, with an additional $125 billion in duties set to follow 21 days later if the dispute continues.
The economic impact of tariffs
Industry groups and economists say the tariff escalation could have broad consequences across both economies. “The (U.S.’s) move is reckless and will cause economic hardship in both the U.S. and Canada,” Richard Lyall, president of the Residential Construction Council of Ontario (RESCON), said in a statement. He stressed that deeply integrated supply chains mean a tariff conflict leaves no clear winners.
Analysts warned these measures could weaken the Canadian dollar, push up consumer prices and put pressure on monetary authorities to ease borrowing costs. Douglas Porter, chief economist at BMO Capital Markets, wrote that if the announced tariffs remain in place for a year the economy could face the risk of a modest recession, with a few quarters of contraction possible. Porter anticipates the Bank of Canada could respond with gradual rate cuts to support demand, forecasting a lower benchmark rate by autumn if conditions deteriorate.
RSM Canada economist Tu Nguyen noted tariffs would likely lift headline inflation from around two per cent to roughly 2.7 per cent as businesses pass higher duties on to customers. She also expects the Canadian dollar to weaken further, a depreciation that can make exports cheaper for U.S. buyers but raises costs for Canadian firms and households that rely on imports.
Because tariffs act like an added cost on cross-border trade, they can ripple through manufacturing, retail and services. Companies may face higher input costs, disrupted procurement and the need to adjust sourcing and pricing strategies—changes that can reduce output, investment and employment over time.
Housing affordability at risk
Several associations warned the current tariff threat is broader and potentially more damaging than the earlier 2018 duties on steel and aluminum. RESCON’s Lyall said the proposed duties will raise construction costs and could slow residential building activity further, worsening an already strained housing affordability situation.
Candace Laing, president of the Canadian Chamber of Commerce, described the incoming tariffs as “profoundly disturbing,” saying they will “drastically increase the cost of everything for everyone,” and harm families, communities and businesses across the country.
How much will tariffs cost Canadian families?
The Canadian Chamber has estimated that a uniform 25% tariff could cost the average Canadian household about $1,900 per year. That estimate could rise if trade measures escalate or broaden. Canada’s initial list of targeted U.S. goods includes everyday items such as meat, milk, carpets and curtains, along with a range of other consumer and industrial products. If the dispute continues, Ottawa has signaled it will expand duties to a much larger basket of American products.
Agricultural groups are particularly concerned: the first round of Canadian tariffs includes fruits and vegetables such as raspberries, peppers and cucumbers, prompting warnings from the Canadian Federation of Agriculture. CFA president Keith Currie emphasized the mutual reliance of Canadian and U.S. farmers for markets and inputs like fertilizer, and cautioned that trade fights benefit competitors elsewhere while harming domestic producers.
Restaurants and food service businesses also warned of painful effects. Kelly Higginson, president and CEO of Restaurants Canada, said the industry—valued at about $120 billion and one of Canada’s largest employers—remains vulnerable as it continues to recover from the pandemic. Higginson urged government support for job retention, such as wage subsidies, should the trade dispute lead to significant and sudden job losses.
Overall, businesses and economists forecast that the tariffs will raise costs, weaken demand for exports, and create uncertainty that could slow investment and hiring. Policymakers will face difficult choices between protecting industries, keeping inflation in check and supporting economic growth as the dispute unfolds.
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