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📰 EVEN SHORT-LIVED TARIFFS REPRESENT BLOW TO CANADA’S ECONOMY Assuming the U.S. tariffs on imports from Canada as they now stand are maintained only through the first half of the year, Oxford Economics still anticipates a big hit to Canada’s economy. It doesn’t anticipate the tariffs on the U.S.’s closest neighbors will be permanent and most will be lifted by 3Q. If so, Oxford projects Canada’s real GDP will decline a cumulative 1.3% peak to trough between 1Q and 4Q. The unemployment rate will rise to 7.8% from 6.7% in that time, headline CPI inflation likely more than doubles to 5.1% by mid-2025 from 1.8%, and households will cut discretionary spending as disposable income is squeezed.

February 3, 2025
Frank

EVEN SHORT-LIVED TARIFFS REPRESENT BLOW TO CANADA’S ECONOMY

Assuming the U.S. tariffs on imports from Canada as they now stand are maintained only through the first half of the year, Oxford Economics still anticipates a big hit to Canada’s economy. It doesn’t anticipate the tariffs on the U.S.’s closest neighbors will be permanent and most will be lifted by 3Q. If so, Oxford projects Canada’s real GDP will decline a cumulative 1.3% peak to trough between 1Q and 4Q. The unemployment rate will rise to 7.8% from 6.7% in that time, headline CPI inflation likely more than doubles to 5.1% by mid-2025 from 1.8%, and households will cut discretionary spending as disposable income is squeezed.