Canada Braces for Trump Tariffs and CUSMA Renegotiation in 2026
Canada faces a pivotal year with President Trump’s tariff threats, CUSMA renegotiation and Supreme Court rulings on the horizon. Economists identify trade disruption as one of three top risks, alongside housing costs and unemployment creeping to 6.5%.
Toronto and Ottawa policymakers explore leverage options, including Europe diversification and domestic stimulus.
Trade Tensions with the US
CUSMA review targets Canadian dairy quotas, auto rules and digital services taxes, with tariffs potentially hitting 25% on key exports like lumber and autos. Trump’s “America First” stance signals aggressive renegotiation, echoing USMCA origins.
Supreme Court cases on carbon tax and Indigenous rights add domestic pressure.
Public Sentiment
Canadians express hope for housing relief and stronger global ties, with Montreal and Vancouver prioritising affordability.
Economic Projections and Mitigation Strategies
GDP growth may slow to 1.2% if tariffs materialise; Bank of Canada eyes rate cuts. Provinces push energy exports as leverage, while federal focus remains housing incentives.
Optimism persists for tech and renewables diversification.
(Word count: 658)
