Media: Trump’s tariffs push Canada to brink of recession

Canada is on the brink of a major economic downturn following sweeping tariffs imposed by U.S. President Donald Trump, delivering the most significant trade shock in nearly a century.

The U.S. has introduced 25 per cent tariffs on Canadian and Mexican imports, with a lower 10 per cent rate applied to energy and critical minerals, shattering decades of economic integration in North America, Caliber.Az reports via foreign media.

The move is expected to hit Canada and Mexico hardest due to their greater reliance on exports.

The Bank of Canada warns that, if the tariffs remain in place, Canada’s economy could contract by 3 per cent over the next two years. Key sectors such as manufacturing, metals, and energy face severe disruption, particularly in Ontario and Quebec.

The uncertainty has already led to production cuts and job losses, with a KPMG survey showing over half of Canadian firms had begun downsizing in anticipation.

With exports forecast to shrink by 8.5 per cent and business investment expected to drop nearly 12 per cent, analysts predict Canada will slip into recession unless tariffs are swiftly reversed. The federal government has retaliated with countertariffs on $30 billion of U.S. goods, set to increase to $155 billion within weeks.

Economists suggest the Bank of Canada will prioritise economic stability over inflation concerns, with interest rate cuts expected to cushion the downturn. However, the broader impact of Trump’s trade war is likely to ripple across North America, slowing growth and fuelling inflation, while also threatening a U.S. recession.

By Aghakazim Guliyev