The U.S. has announced broad and significant tariff hikes, but Canada and Mexico remain exempt under CUSMA/USMCA—for now. A baseline 10% tariff takes effect on April 5, with higher rates following on April 9, including a 34% hike on Chinese imports, 26% on India, 46% on Vietnam, and 20% on the EU.
While Canada faces a smaller increase in auto tariffs, the overall rise in U.S. import tariffs—potentially exceeding 20%, the highest in over a century—poses risks to economic growth and supply chains. The U.S. lacks the domestic production capacity to replace imports quickly, and global supply chain disruptions could impact Canada.
Trade uncertainty is expected to slow consumer and business spending, with investment in Canada likely remaining weak. Given additional economic headwinds from government spending cuts and reduced immigration, the U.S. economic outlook faces growing risks.
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