Economists say new U.S. tariffs and trade restrictions on Canadian goods are unlikely to significantly affect Canadian economic growth in the near term.
Yet they say the latest escalation raises the risk of a more prolonged trade conflict, adding uncertainty for Canadian businesses and increasing the odds that the economy could stall or shrink in the fourth quarter.
A TD Economics client note says the latest American response to Ottawa’s counter-tariffs was threefold: stop imports of some products, remove tariffs on a handful of products, and introduce new tariffs on others.
It says the shift in tariff focus should not materially impact domestic growth in the near term, but represents “another manifestation of policy uncertainty” reinforcing concerns about U.S. market access and weighing on Canadian firms.
Capital Economics says in a note the U.S. ban on some Canadian goods — including whey, alcoholic beverages, and motorcycles — will have “little effect on either economy.”
Still, it says the escalation means the tariffs could remain in place for longer, dealing the Canadian economy a larger blow and potentially causing Canada’s economy to stagnate or contract in the fourth quarter.
This report by The Canadian Press was first published Sept. 9, 2026.
— With files from Craig Lord in Ottawa.
By Brett Bundale | Copyright 2026, The Canadian Press. All rights reserved.