With Donald Trump re-elected as U.S. President, Canadians are bracing for potential economic and trade impacts. Trump’s approach to tariffs, trade agreements, and economic policies could introduce new challenges for Canada, as his administration seeks to prioritize American interests in a highly integrated North American economy.
Heightened Tariff Risks
Trump’s re-election could bring a renewed focus on imposing universal tariffs, potentially at 10% or more on all imports into the U.S., including Canadian goods. Without exemptions, this move could cost the Canadian economy billions, affecting a range of industries, from manufacturing to agriculture. Canada will need to assert its status as the U.S.’s largest trading partner, highlighting deeply integrated supply chains and shared economic interests. However, experts warn that Canada cannot assume automatic exemptions and may face an uphill battle to minimize the impacts of any new tariffs.
CUSMA Review and Potential Renegotiation
Trump’s administration will likely approach the 2026 review of the Canada-United States-Mexico Agreement (CUSMA) with a critical eye, potentially seeking amendments or using tariff threats as leverage. This could lead to changes affecting Canadian exports, particularly in sectors like dairy, automotive, and energy. Canadian policymakers and businesses may need to prepare for a less predictable trade landscape, with new concessions possibly required to protect key industries.
Strategic Adjustments for Canadian Businesses
Trump’s “America First” policies could push Canadian industries to consider diversifying their export markets to reduce dependency on the U.S. While the Canadian government may pursue diplomatic channels to mitigate any economic fallout, businesses will need contingency plans and may benefit from expanded trade partnerships outside North America.
In this climate, Canada’s approach will likely emphasize proactive engagement with U.S. policymakers, defending economic interests, and advocating for the mutual benefits of Canada-U.S. trade—aiming to safeguard stability in a shifting trade landscape.
