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Economic Viewpoint

Tariffs and Counter-Tariffs: Industries Caught Between a Rock and a Hard Place

March 14, 2025
Florence Jean-Jacobs
Principal Economist

With the US administration blowing hot and cold since President Trump was sworn in, Canadian businesses are dealing with a high level of uncertainty. Tariffs are implemented and then put on hold (the list of tariffs is changing by the day) while adjusting to Canadian responses. In this Economic Viewpoint, we explore the anticipated sectoral impacts of announced Canadian counter-tariffs, which come on top of the impact of US tariffs. While the US tariff shock will have the biggest impact on the Canadian economy, we shouldn’t overlook the negative repercussions that counter-tariffs and a weaker Canadian dollar will have on businesses sourcing from the United States. Some industries are caught between a rock and a hard place, risking a drop in US demand for their products and an increase in their supply costs if substitutes are not easily found. This is the case for food manufacturing, machinery, plastics, chemicals, automotives, aerospace, wholesale trade, and animal and crop production (summary table1).


1 For the purposes of the sector analysis, we have assumed that the tariffs announced on March 4, which already apply to 62% of Canadian exports to the United States, will be expanded to all goods in April. This will include motor vehicles and other products that are compliant with Canada–United States–Mexico Agreement (CUSMA) (for which tariffs are currently postponed).

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively.
IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.