Canadian businesses, politicians, and consumers are bracing for additional tariffs from the U.S. as President Donald Trump undertakes the next phase of his “America First” trade agenda.
The exact details of the import tariffs the Trump administration plans to impose on Canadian goods as part of what it calls “Liberation Day” remains unclear.
However, Trump has said that he is considering slapping across the board tariffs of 20% on all imports into the U.S., a move economists say would be disastrous for the global economy.
Across Canada, businesses, governments, and consumers are preparing for the worst as additional U.S. tariffs go into effect today (April 2).
Canadian provinces, facing the prospect of bigger deficits, are selling more bonds.
The seven provinces that have proposed budgets so far this year reported a combined deficit of $32 billion for the 2025-2026 fiscal year, double estimates from a year ago.
Seven provinces, including Ontario, plan to raise nearly $30 billion from bond sales. That’s more than quadruple the $6.7 billion raised through bonds in 2024.
So far, investors have been receptive to the provincial bond sales, with demand rising to meet supply as the market gets stronger.
The federal government has also pledged financial support to small and medium-sized businesses across Canada through low-interest rate loan guarantees to help them with tariffs.
And many businesses ordered a flurry of products and materials ahead of the April 2 deadline for Trump’s tariffs to come into effect, buying items before they were hit with extra duties.
On the consumer front, there have been reports of people rushing to buy vehicles, appliances, and other big-ticket items before tariffs lead to higher prices.
The Bank of Canada has warned that a trade war with the U.S. would likely push the country into an economic recession and there are early indications of a slowdown taking place.
Preliminary results from Statistics Canada show that the Canadian economy posted no growth in February of this year.