Episode summary
Trump’s Tariffs on Canada: Economic Pain or Long-Term Gain?
Wall Street Week
· · 11 min · Guests: Louise Penny, Goldy Hyder, Barry Zekelman, Stephen Poloz, Michael McKee
Summary
President Trump’s new tariffs have strained the long-standing U.S.-Canada trading relationship, and the report from Knowlton, Quebec, shows how quickly politics has seeped into everyday business and consumer choices. Canadians interviewed described a sense of betrayal, falling U.S.-bound commerce, and a shift away from assumptions that geography and alliance alone guaranteed prosperity.
The economic damage is showing up in weaker trade flows, softer growth, and rising unemployment. A former Bank of Canada governor warned that both countries could lose around 2% of GDP under the new trade environment, with the pain concentrated in autos, steel, aluminum, copper, and forestry. The report also cited Canada’s 2025 growth slowing to 1.7% and job losses pushing unemployment to 6.7% in February.
Business leaders were split on the fallout. One Canadian business advocate said executives remain cautious and “frozen,” while a steel executive with operations in both countries argued the tariffs are forcing him to shift more production to the U.S. and that the policies are working there. Several guests said the U.S., Canada, and Mexico still need a functioning USMCA/CUSMA framework, even if the current tensions make renewal uncertain.
Key takeaways
- The report says Trump’s tariffs have already pushed Canadian imports from the U.S. down and made the relationship feel fragile on the ground.
- A former Bank of Canada governor said both countries could lose around 2% of GDP from the new trade environment.
- Canada’s 2025 GDP rose just 1.7%, and February unemployment climbed to 6.7% after the country shed the most jobs in more than four years.
- One business leader said many Canadian CEOs are still "frozen," keeping only maintenance running until trade conditions improve.
- A steel executive said he is paying about $6 million to $7 million a month in tariffs and shifting more production to the U.S.
- Several speakers argued that USMCA/CUSMA remains essential and that a weak Canada or Mexico is not in the U.S. interest.
Notable quotes
“-Since President Trump imposed new tariffs on imports from Canada, the relationship has soured”
“-We're all going to lose around 2% of our GDP because of the new trade environment”
“-We're having to pay roughly, you know, almost $250, $275 a ton, U.S”
How the episode opens
-An hour north of the line dividing the U.S. and Canada, in a small town called Knowlton, the cross-border relationship feels fragile. -We love the American people, but we're also defensive about our economy and want to...
want to support Canadian business, which we feel might be under attack right now. -Having family in the United States as well makes things a little precarious right now. -Since President Trump imposed new tariffs on imports from Canada, the relationship has soured.
Canadian imports from the U.S. are down, and the nation slipped from being the largest buyer of U.S. goods to number two, behind Mexico.
-Canadians know that our old comfortable assumptions that our geography and alliance memberships automatically conferred prosperity and security, that assumption is no longer valid. We are rapidly diversifying abroad. The past few days, we've concluded new strategic partnerships with China and Qatar.
-Although Carney is optimistic about Canada's economic agenda, February's jobs report paints a bleaker picture. The country shed the most jobs in more than 4 years last month, sending unemployment up to 6.7% from 6.5% in January. -We're all going to lose around 2% of our GDP because of the new trade environment.
That includes the United States. When I say 2%, for somebody, it's 100% of their livelihood. -Stephen Poloz succeeded Mark Carney as governor of the Bank of Canada and is now a special adviser at Canadian business law firm Osler.
Let's talk a little bit more about the loss. Where do we see it now? -You see it in autos, you see it in steel, you see it in aluminum, you see it in copper, and you see it in the forestry sector.
These are sectors that are deemed, you know, really strategically important. -As U.S. tariffs weighed on Canadian exports for much of the year, real GDP contracted in 2 of the 4 quarters of 2025.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- us canada trade tariffs
- trump trade policy
- canadian economic impact
- steel industry
- banking policy impact
Watch the episode
Watch “Trump’s Tariffs on Canada: Economic Pain or Long-Term Gain?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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