Impact of U.S. Tariffs on Canada

The recent introduction of significant tariffs by the U.S. on Canadian goods has raised serious concerns for the Canadian economy. Specifically, a 25% tariff has been imposed on various exports from Canada, which, along with an exemption for the auto sector, underscores the precarious trade relationship. This shift in trade policy could potentially lead to a moderate recession in Canada, with GDP growth forecasted to drop dramatically from 1.8% to just 0.5% under the current tariff regime. The Canadian government's countermeasures, including corresponding tariffs on U.S. imports, aim to mitigate this impact, but the situation remains fluid and highly dependent on further developments.