Listeners, today’s Canada Tariff News and Tracker brings you the latest on how recent U.S. trade policy—driven by President Trump’s administration—is reshaping Canada’s economy, key industries, and international relationships.

The biggest headline this week remains the 25 percent U.S. tariff imposed on most Canadian exports, with an additional 10 percent duty on Canadian energy products. President Trump’s executive order from February cited national security and concerns over synthetic opioid flows from Canada as the rationale. The White House has also warned that any Canadian retaliation could be met with even broader U.S. tariffs. The impact expands across autos, steel, and aluminum—sectors that form the backbone of Canada’s exports to the U.S.

This tariff escalation could not have come at a tougher time. The Royal Bank of Canada reports that Canada entered a technical recession mid-2025, with GDP shrinking by 1.6% in the second quarter after a 2% slide in the first quarter. Canadian exports plunged 7.5% in Q2, with auto exports down nearly 25%. Economists say this steep drop was not just predictable—it’s the intended effect of tariffs: reduce cross-border trade, shrink deficits, and force supply-chain realignment.

The Canadian government is not sitting still. Prime Minister Mark Carney has unveiled a $6.15 billion aid package to protect beleaguered sectors. The Strategic Response Fund is allocating $5 billion for retooling and diversification, while the Regional Tariff Response Initiative is pushing $1 billion into small and medium-sized businesses. New workforce programs target re-skilling in affected industries, aiming to build resilience and reduce reliance on U.S. trade.

Meanwhile, a $3.6 billion infusion is flowing specifically to the auto sector as the government delays its original zero-emissions vehicle targets and shifts toward preserving jobs and stabilizing investment. Automakers like Tesla have responded to the tariffs by hiking Canadian EV prices over 20%, fueling a collapse in demand for both electric and traditional vehicles. Faced with plummeting exports and climbing production costs—now up to 8% higher by year-end—auto giants such as Ford and GM are warning of additional price hikes or job cuts.

On the ground, the “Build, Baby, Build” economic strategy is channeling half a trillion dollars into Canadian infrastructure. The plan aims to accelerate port, energy, and transportation projects, opening new markets in Europe and Asia and reducing our dependence on the U.S. for exports. While this marks a dramatic policy shift, environmental groups are raising alarms about the social and ecological costs.

For Canadian consumers, the immediate effects are higher prices for everything from cars to groceries. Yale University’s Budget Lab estimates that tariffs will drive up the average price of consumer goods by nearly 2%, with particularly steep hikes expected on clothing and footwear. The broader risk is stagflation: higher costs, slowed growth, and rising unemployment, with Canada’s rate already hitting a nine-year high of 7.1%.

Listeners, these are turbulent times for anyone tied to Canada’s export engines. As tariffs and countermeasures evolve, we’ll keep tracking how government relief and shifting trade policies play out on factory floors, family budgets, and capital markets.

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