Trump’s 25% Tariff Threat: New Analysis Reveals Severe Economic Fallout for Both Canada and the U.S. – Canadian Chamber of Commerce

November 28, 2024

FOR IMMEDIATE RELEASE: Ottawa, November 28, 2024: The Canadian Chamber of Commerce’s Business Data Lab (BDL) has released alarming new figures on the economic fallout of the 25% tariff on U.S. imports proposed by President-elect Donald Trump.

Building on its recent Partners in Prosperity report, these new findings highlight the far-reaching consequences for both economies. In the scenario where other countries impose retaliatory tariffs on their imports from the United States:

• Canada’s GDP would shrink by 2.6% (or roughly CAD $78 billion), costing Canadians approximately $1,900 per person annually.
• U.S. GDP would shrinkby 1.6% (or roughly USD $467 billion), costing Americans approximately $1,300 per person annually.

A 25% tariff applied across-the-board on all U.S. imports could push Canada’s economy into recession by the middle of 2025. But these results also underscore Canada’s economic importance to the U.S. — something that’s often underappreciated south of the border. Make no mistake, if Trump imposed these tariffs, it would represent a significant negative shock to the U.S. economy. It would raise costs for businesses, make American production less competitive internationally, and raise prices even more for consumers who’ve recently suffered through the pandemic and the highest inflation in generations.

• Stephen Tapp, Chief Economist. Canadian Chamber of Commerce

To read the updated charts and analysis, click here.

Canada and the U.S. share one of the world’s most integrated trading relationships, with three-quarters of trade involving business inputs, rather than finished goods. The updated model results find that American tariffs would hit key industries like energy, autos, mining, and pharmaceuticals the hardest.

The Canadian Chamber also highlights areas that could draw U.S. scrutiny, such as Canada’s proposed digital services tax and notes that strategic planning is essential to protect Canada’s economy and interests.

About the Canadian Chamber of Commerce — The Future of Business Success 

The Canadian Chamber of Commerce is Canada’s largest and most activated business network — representing over 400 chambers of commerce and boards of trade and more than 200,000 business of all sizes, from all sectors of the economy and from every part of the country — working to create the conditions for our collective success. The Canadian Chamber of Commerce is the undisputed champion and catalyst for the future of business success. From working with government on economy-friendly policy to providing services that inform commerce and enable trade, we give each of our members more of what they need to succeed: insight into markets, competitors and trends, influence over the decisions and policies that drive business success, and impact on business and economic performance.   

Media Contact

Rewa Mourad
Public Relations Specialist
rmourad@chamber.ca