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Markets Plus

Leading Through Uncertainty: Navigating the Impacts of U.S. Tariffs on Canada

Mar 12, 2025
Guests Shelly Kaushik, Senior Economist at BMO, Jason Giovannetti, Director of Canadian Commercial FX Sales, and Swaroop Shenoi, Vice President of Global Transaction Banking at BMO, dive into the impact of U.S. tariffs on Canada. They discuss how Canadian businesses are adapting to economic challenges and strategies for navigating tariff-induced currency volatility. The conversation highlights the need for effective communication between businesses and experts, as well as exploring new markets and financial solutions to manage risk.
50:04

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Quick takeaways

  • The imposition of U.S. tariffs on Canadian exports could drastically reduce Canada's GDP growth from 1.8% to 0.5% amid rising inflation pressures.
  • Businesses must adapt their supply chains and explore financial instruments to manage increased costs and maintain competitiveness in a volatile market.

Deep dives

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.

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