New trade barriers between the US and Canada are projected to reduce Canadian economic growth by 0.3 percentage points within three years.
New US Section 338 tariffs and Canada’s retaliatory measures will shave approximately 0.3 percentage points off Canadian GDP by 2027. The impact is expected to materialize gradually, with the bulk of the drag occurring in late 2026 and 2027.
The estimate follows recent escalations in trade restrictions, which have raised concerns over cross-border supply chain disruptions. Prior trade tensions between the two nations had limited macroeconomic effects, but the latest measures target broader sectors.
Markets have not yet fully priced in the long-term growth implications, though the Canadian dollar and equities may face downward pressure as details emerge.