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After months of uncertainty surrounding Canada–U.S. trade negotiations, talks have broken down and both countries are moving forward with additional tariffs. For Canadians, that understandably raises questions. What could this mean for jobs, prices, businesses, investments, and the broader economy?
There are reasons for concern, but also reasons to keep the situation in perspective.
What has changed?
The U.S. recently imposed new tariffs on $27.6 billion worth of Canadian goods. In response, the Government of Canada has announced matching counter-tariffs of 15, 25, and 50 per cent on $27.6 billion of U.S. imports, effective September 8, 2026.
The Canadian measures will target products in sectors including steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. The federal government has also announced $7.5 billion in new and enhanced support for Canadian workers and businesses affected by U.S. tariffs.
Further changes are possible. The U.S. administration is considering additional measures affecting Canadian autos and auto parts beginning in 2027, making it difficult to know exactly where the trade relationship goes from here.
What are we likely to see?
The most certain thing right now may be continued uncertainty.
Businesses that rely heavily on U.S. trade could face higher costs, changing supply chains, reduced demand, or delayed investment. Workers in particularly exposed industries may understandably have concerns about job security.
Consumers could also see higher prices for some goods. Tariffs are paid by importers, and at least some of those additional costs can eventually make their way to consumers. The Bank of Canada estimates that a substantial portion of increased tariff costs ultimately passes through to consumer prices.
We may also see an increased emphasis on buying Canadian, strengthening trade within Canada, and finding new international markets. Canadian businesses have already been adapting by changing suppliers, production, shipping arrangements, and export markets.
What is less likely?
It's equally important to understand what the latest developments don't mean.
They don't mean that all trade between Canada and the U.S. has stopped or that everything crossing the border is suddenly subject to a 50 per cent tariff. In fact, most trade between Canada and the U.S. remains tariff-free, although some industries are being significantly affected.
Nor do tariffs necessarily point to an immediate, economy-wide crisis. Canada has been dealing with heightened U.S. trade uncertainty since early 2025. The impact has been significant: growth has been weak, some sectors have been hit hard, and businesses have had to adapt. But the Canadian economy and financial system have also demonstrated resilience.
The Bank of Canada recently reported that consumer spending has remained resilient, exports have begun to recover, and businesses are adapting to the new trading environment. Its latest Financial Stability Report also found that Canadian households and businesses remain in generally stable financial condition and that Canada's financial system continues to function well despite tariffs and trade uncertainty.
That doesn't mean there won't be challenges ahead. It’s important to remember that there is a difference between economic uncertainty and economic crisis.
Support is available for businesses and workers
The federal government's response includes additional measures intended to help businesses and workers adjust. Among them are increased funding through the Regional Tariff Response Initiative, greater access to liquidity for small and medium-sized businesses, expanded eligibility for tariff relief programs, additional Employment Insurance and worker supports, and new funding intended to help Canadian businesses diversify.
These measures won't eliminate the effects of tariffs, particularly for businesses directly exposed to U.S. trade. But they may provide some breathing room while businesses adjust their plans, markets, and supply chains.
What should you do?
For most households, periods of economic uncertainty are a good time to review rather than react.
If you're concerned about your finances, consider looking at your emergency savings, household budget, debt, investments, and upcoming borrowing needs. If you're investing for the long term, short-term economic headlines generally shouldn't be the sole reason to make significant changes to a carefully considered financial plan.
Business owners may want to take a closer look at cash flow, borrowing needs, suppliers, customers, and their exposure to U.S. trade. It may also be worth exploring whether any of the newly announced federal support programs apply to their business.
Above all, try not to make financial decisions based on the latest headline.
Canada faces a challenging period as its relationship with its largest trading partner changes. But Canadian households, businesses, and financial institutions have already spent considerable time adapting, and there is evidence that the economy is beginning to adjust. The Bank of Canada expects growth to pick up after a period of weakness, although considerable uncertainty remains.
At Kindred, we're here to help our members navigate both the expected and the unexpected. If you're wondering what the changing economic environment could mean for your savings, investments, mortgage, business, or financial plans, visit a branch, or make an appointment to meet with us.
Sometimes the most helpful response to uncertainty isn't predicting what happens next. It's making sure you're prepared for a range of possibilities.