As the global economic landscape continues to shake under the weight of U.S. President Donald Trump’s aggressive tariff policies, the ripple effects are at the forefront of discussions in both Canadian provinces and across the border. When Trump imposed new tariffs on Canadian products, including a staggering 25-percent levy on steel and aluminum, Canadian officials and economists sounded alarms about the consequences. The profound uncertainty surrounding these trade policies has led various experts to predict dire outcomes for the Canadian economy.
On March 20, 2025, Saskatchewan's legislative assembly commenced its much-anticipated spring session, featuring a budget that predicted a $12 million surplus yet raised eyebrows due to its glaring omission of contingency plans to respond to the looming tariff crises. NDP Leader Carla Beck took a firm stand, criticizing the Sask. Party government for not addressing the impending challenges posed by U.S. tariffs. “The Sask. Party budget contains nothing to protect Saskatchewan people and industry from tariffs,” she declared, emphasizing the impending risks of potential $1.4 billion revenue loss should broad U.S. tariffs go into effect next month.
In a response reflecting determination, Premier Scott Moe reassured the assembly, stating he would collaborate with federal authorities, fellow premiers, and industry experts to navigate the turbulent waters of trade negotiations. “What we do know is that we are going to do our best to work alongside the federal government,” Moe expressed. However, the NDP’s push for a motion condemning Trump’s tariff actions faced opposition from Moe, who altered the language to emphasize, “Canada will never be the 51st state.” This change highlighted an effort to diffuse the rhetoric while acknowledging the challenges posed by the U.S. administration.
The looming uncertainty fueled a broader sentiment across Canada. Economists from TD Economics underscored, “Canada has borne the brunt of President Trump’s tariff action despite having one of the most equal trade relationships of any country.” With the April 2 deadline for the U.S. administration’s tariff plans approaching, it is clear that repercussions are anticipated, with forecasts suggesting a significantly heightened average tariff for Canadian exporters, set to reach 12.5 percent and potentially decrease to 5 percent through negotiations.
“The tariffs will pull Canada into a ‘shallow’ recession this year,” TD experts warned, depicting a concerning picture of the economic landscape. Adding to the concern, BMO Capital Markets projected that the economic fallout could include over 100,000 net job losses, pushing the unemployment rate alarmingly high to 8 percent by year’s end.
In light of the volatility, the Bank of Canada, led by Governor Tiff Macklem, emphasized a changing approach to monetary policy, focusing on mitigating risks rather than attempting to dictate economic pathways amid unpredictable tariff outcomes. Macklem stated, “If we were to guess where the economy is heading and make policy to optimize that outcome, we’d risk getting it wrong.” His comments underline the immense uncertainty that marks the evolving trade dynamics with the United States.
Reflecting on the broader implications, U.S. Senator Rand Paul weighed in on the impacts of tariff policies, noting, “Tariffs are simply taxes,” and warning that while they aim to stifle Canadian imports, the resulting costs would ultimately burden American consumers. Analysts have suggested that Trump's tariffs could cost the average American household more than $1,200 annually, as confirmed by the Peterson Institute, leading to doubts about the effectiveness of such policies in bolstering local economies.
As the clock ticks down to April 2, when the Trump administration plans to unveil its new tariff regime, the narrative surrounding trade bears implications not only for Canada but also for U.S. consumers and businesses. Experts maintain that retaliatory tariffs from Canada, while aimed at pressing the U.S. to reconsider its stance, may inflict more harm than good upon Canadian households and industries. “Retaliation will only hurt the U.S. slightly, while it will hurt the Canadian and Mexican economies substantially,” cautioned Joseph Steinberg, an economics professor at the University of Toronto.
Deteriorating consumer sentiment could mirror these tensions. According to National Bank of Canada economists, Canadians' optimism has plunged to unprecedented lows, driven by job insecurity and reluctance to make significant purchases. The economic outlook appears shaky as fears of retaliation linger amid fears of an inevitable slowdown in economic growth driven by external pressures, including those from the trade war.
In the shifting tides of trade, Saskatchewan's situation serves as a microcosm of the broader Canadian struggle. As government officials deliberate and economists speculate, businesses and families alike brace for the turbulent days ahead, calling into question the future viability of established trade relationships under President Trump’s starkly protective policies.
As discussions unfold in legislative halls and economic forecasts take shape, one thing remains certain: the urgency to navigate these unchartered waters with clarity, foresight, and unified action has never been more critical. Whether Canadians will feel the impact of retaliatory measures or emerge resilient in the face of adversity remains to be seen, but the stakes are undeniably high for every stakeholder in this intricate equation.
