The tariffs will take affect at 12:01 a.m. on Wednesday if Canadian and U.S. officials do not reach a deal before the deadline<\/p>\n
A new round of 50 per cent tariffs on nearly US$20 billion of Canadian goods are scheduled to go into effect at 12:01 a.m. on Wednesday unless a deal can be reached between Canadian and U.S. trade negotiators. The duties are being imposed through three proclamations signed last month by U.S. President Donald Trump, who claimed the tariffs are in response to Canada\u2019s \u201cdiscriminatory treatment of U.S. commerce\u201d on three fronts: alcohol, automobiles and dairy products. Here\u2019s what top economists are saying about the potential impact of the new tariffs and what Canada might do in response.<\/p>\n
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The new tariffs are expected to impact a wide range of Canadian goods, from Canadian wine and whisky to cement and hockey sticks.<\/p>\n
According to an analysis by BMO Economics senior economists Shelly Kaushik and deputy chief economist Michael Gregory, the largest impacts will be in the following sectors:<\/p>\n
\u201cUltimately, the impact on Canada\u2019s economy will rest on the extent (and duration) of these tariff threats,\u201d Kaushik and Gregory wrote. \u201cThis comes just as growth looked to be finding its footing more than a year into the trade war and months into the Iran war-driven energy price shock.\u201d<\/p>\n
Economists have different forecasts on the tariffs\u2019 potential impact on Canada\u2019s economic growth.<\/p>\n
Kaushik and Gregory said the tariffs could reduce annual real gross domestic product growth by roughly 0.5 percentage points if implemented in full.<\/p>\n
Andrew Hencic, director and senior economist for TD Economics, said the tariffs will likely take 0.3 to 0.6 percentage points off GDP growth over the next year if they are imposed and\u00a0 maintained.<\/p>\n