Ottawa, July 21: Canada’s already fragile labour market could face another major setback if U.S. President Donald Trump’s proposed 50 per cent tariffs on a wide range of Canadian products take effect next month, according to trade experts and economists.
The new tariffs, announced by President Trump on Monday, target dozens of Canadian industries, including dairy and agriculture, alcoholic beverages, automobiles and auto parts, along with hundreds of additional products such as clothing, finished wood and paper products, sporting goods, hockey sticks, plants and pet accessories.
Many of these goods would otherwise have qualified for tariff-free access under the Canada-United States-Mexico Agreement (CUSMA).
If implemented on August 19, the tariffs are expected to make Canadian exports significantly more expensive for American buyers, reducing demand and placing increased pressure on Canadian manufacturers and exporters.
John Boscariol, a partner in the International Trade and Investment Law Group at McCarthy Tétrault LLP, warned that industries directly targeted by the new tariffs face a growing risk of layoffs.
“When you look at products such as alcohol, wood products, apparel, hockey sticks and sporting goods, there is certainly a risk to employment in those industries,” Boscariol said, noting that job losses often take time to materialize but become increasingly likely as trade restrictions continue.
Economists at BMO, CIBC and TD Bank estimate that the affected sectors account for approximately five per cent of Canada’s exports to the United States, representing nearly $30 billion in annual trade.
According to Andrew DiCapua, Principal Economist at the Canadian Chamber of Commerce, nearly 100,000 Canadian jobs could be vulnerable if the tariffs remain in place.
“There is going to be an impact on the jobs market should these tariffs be implemented at this level,” DiCapua said. “If Canadian manufacturers are no longer competitive because of a 50 per cent tariff, businesses will face increasing pressure on their operations, potentially resulting in reduced hours, layoffs or production cutbacks.”
Beyond employment, analysts warn that prolonged tariffs could discourage investment, reduce business confidence and further weaken Canada’s manufacturing sector, which has already been coping with more than a year of trade uncertainty.
Prime Minister Mark Carney has strongly criticized the proposed tariffs, calling them a violation of the Canada-United States-Mexico Agreement (CUSMA). Following a telephone conversation with President Trump, Carney said both leaders had agreed to intensify trade negotiations in an effort to resolve the dispute before the tariffs are scheduled to take effect.
Business leaders continue to urge both governments to reach a negotiated settlement, warning that an escalating trade conflict would harm workers, exporters and consumers on both sides of the border.
While negotiations remain ongoing, economists caution that the uncertainty itself is already affecting business planning and hiring decisions, leaving many Canadian industries preparing for another period of economic disruption if the tariffs proceed as announced.