Canadian businesses are assessing the impact of 50% U.S. tariffs following the return of Canadian negotiators. The tariffs cover approximately $28 billion in Canadian exports to the U.S., affecting various sectors. BMO estimates that these tariffs could reduce Canada’s GDP growth by half a percentage point due to decreased investments. While this represents only a small portion of Canada’s total exports to the U.S., sectors like electronics, plastics, furniture, industrial machinery, and paper products will be significantly impacted.

The provinces of Ontario, Quebec, and British Columbia are particularly vulnerable to the tariffs, with manufacturing concentrated in these regions. Smaller businesses exporting consumer goods like honey, candles, and hockey sticks are also at risk. The Canadian Federation of Independent Business reports that 40% of its members exporting to the U.S. are affected by the tariffs, with 35% expecting revenue to drop significantly.

Economist Trevor Tombe predicts that tens of thousands of jobs could be lost due to the tariffs, affecting various sectors and supporting industries. The uncertainty surrounding the tariffs poses a significant risk to the Canadian economy, with potential retaliatory measures and the threat of further tariffs on Canadian autos and steel. The failure of trade talks also casts doubt on the future of the Canada-U.S.-Mexico Agreement, with potential repercussions on job losses and economic impact.

Overall, the ongoing trade tensions and tariffs are expected to have a lasting negative impact on the Canadian economy, leading to job losses and hindering business investments until the situation is resolved.