Canada's Economy Is Starting To Crack Under Trade-War Pressure

Canada's economy was already stumbling a few months ago. Now, it is on the brink of recession because of President Trump's tariffs.

- Paul Vieira & Vipal Monga

Canada's economy is starting to shed jobs after months of tariff-fueled anxiety, while the outlook among businesses and consumers has become increasingly dour as one of the U.S.'s largest trading partners braces for more pain to come.

"The tariff shock is hitting hard," said Robert Embree, an economist with Rosenberg Research. Canada is teetering on the brink of a recession, he said. And that is even after Trump seemingly spared Canada from the worst of the reciprocal tariffs levied against virtually all of the U.S.'s trading partners.

Canada has been in Trump's crosshairs since he took office in January. The U.S. leader has blamed Canada for allowing "massive" amounts of fentanyl to cross into the U.S.—an assertion that isn't supported by the U.S.'s own data—and said he wants steel, aluminum and cars now made in Canada to be made in U.S. factories. In his 2 months in office, Trump has hit Canadian manufacturers with 25% levies on cars, steel and aluminum, and targeted billions worth of Canadian goods that aren't part of the Mexico-Canada trade agreement.

The shock of those tariffs and the fear of more has already dented the Canadian economy. Last week, Canada's statistical agency reported that 33,000 Canadians lost their jobs in March, the worst jobs report in more than three years.