Canada finds itself bracing for potential economic turbulence as President Donald Trump has proposed tariffs of 25 percent on nearly all Canadian goods imported to the United States. The tariffs, which first surfaced in late January, had briefly been paused earlier this month, but the countdown to their potential reinstatement is nearly up with the deadline looming on Tuesday.
Graeme Clinton, an economist based in Yellowknife, states the country may be entering "unprecedented times" should these tariffs take effect. With retaliatory measures on the table, Canada aims to counteract the repercussions of such trade barriers on its own imports from the US, with proposed actions affecting billions of dollars’ worth of goods.
At the heart of the conversation around tariffs are Canada’s industries. Premier RJ Simpson noted the Northwest Territories, for example, does not share direct land borders with the US, yet it is not immune to the wider economic consequences. “Nothing good” is anticipated from the potential implementation of these tariffs, according to Clinton, who foresees rising living costs as the direct consequence of tariffs being enacted.
“Life is going to get more expensive,” he added, pointing out how the repercussions of US tariffs might take time to be fully realized among consumers. Nevertheless, Canadian countermeasures could lead to price adjustments more swiftly than expected on specific products.
The initial list of targeted US products for Canadian tariffs features everyday essentials from food items to tires. “Consumers will be affected, especially at the grocery store,” said Clinton. That sentiment was echoed by Justin Nelson, general manager at Yellowknife’s Co-op, who noted increasing customer demands for Canadian products as tariffs were discussed. Some customers even asked for US goods to be banned from the shelves, highlighting the trade tensions' impact on local buying behavior.
Even with the counteractions being put on the table, Clinton warns of broader economic slowdowns stemming from price spikes across the board. Heavy immediate impacts could focus primarily on southern Canada but could eventually trickle up to northern economies as well.
Although rising prices from tariffs on US goods loom on the horizon, Clinton also expects the Canadian dollar to depreciate. An estimate could see reductions somewhere between five to ten percent against the American dollar. This depreciation would raise costs even for items imported from other countries, compounding the challenges facing consumers.
Tourism is another area of concern, particularly as US travelers could find trips to Canada more affordable, albeit with potential increases for Canadian operators facing higher costs from imported goods. Richard McIntosh of Sundog Adventures shared his frustration at the situation and anticipated rising expenses for supplies.
Adding another layer, the Dene Nation voiced concerns over the tariffs' effects on Indigenous businesses. They asserted the economic strain could exacerbate existing disparities, threatening cultural practices tied to economic stability. “I must stress the importance of including our voices relating to trade policy and the impact on our communities,” urged Dene National Chief George Mackenzie.
The situation may present strategic opportunities for Canadian businesses to pivot toward local markets, albeit with limited effect on the US economy. While Clinton acknowledged the importance of buying Canadian products, he reiterated the challenges inherent to shipping practices dictated by US market relations. Mining concerns emerged as well, with business leaders such as Robin Goad from Fortune Minerals discussing how the chaos of tariffs could affect capital markets and industry funding.
Though no direct impacts on specific mining projects are expected yet from the tariffs, the uncertainty itself can have residual adverse effects. A focus on domestic supply chains—compared to reliance on the US—may bolster self-sufficiency, especially as countries reassess their positions on international trade.
According to economic experts, the stance the US takes on tariffs is ill-advised. Clinton stated flatly: “It makes the world less efficient, and it makes goods more expensive. This is not beneficial for either side of the border.”
Further compounding the discussion surrounding tariffs, more Canadians and politicians alike have begun advocating for increased internal trade reforms. This push may yield preventive measures through growth and collaboration among Canadian provinces, potentially mitigating impacts and encouraging trade within Canada itself.
Following the recent pause on tariffs, the national Cabinet has focused on trade barriers impacting trade across provinces. NWT industry minister Caitlin Cleveland’s recent chairing of national discussions on internal trade demonstrates the urgency of finding solutions to bolster economic resilience.
Concerns about the long-term effects of sustained tariffs remain prevalent—Clinton predicts they could last longer and reshape the trading dynamic between Canada and the US fundamentally. The time has come for Canadian policymakers to reassess trade practices and seek reforms. “What we’re facing is serious,” Clinton declared, imploring immediate action to safeguard economic health. The next few days will prove pivotal—as the deadline for tariffs closes in, Canadians can hope for reprieve, but the question lingers: what will the longer-term economic future hold?