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Impact of Trump Tariffs on Canadian Housing Activity
January 21, 2025 | Posted by: Simon Lyn
President Trump, upon taking office, has opted not to impose immediate tariffs but instead issued a trade memo directing federal agencies to assess trade relationships with China, Canada, and Mexico. While this delays direct action, concerns remain over potential tariffs on Canadian and Mexican imports, which could disrupt trade, increase costs, and impact economic activity.
Key Points:
- Potential Tariffs: Trump had proposed tariffs of 25% on Canadian imports, which could negatively impact key sectors such as metals, food, chemicals, machinery, and aerospace. The energy and auto sectors may see exemptions due to high US dependence.
- Economic Consequences: Over 70% of Canadian exports go to the US, making Canada highly vulnerable. Tariffs could raise costs, reduce investment, and slow growth, indirectly affecting sectors such as transportation and housing.
- Canada’s Response: The government plans targeted retaliatory tariffs on US products from politically sensitive states and may implement export restrictions on key resources like oil, potash, and critical minerals.
- Housing Market Impact: If tariffs are enacted, higher costs and economic uncertainty could slow housing activity, reducing demand and confidence.
- Trade Agreement Review: With the USMCA deal up for review in 2026, renegotiations may offer some relief or exemptions, depending on political developments.
While the immediate tariff threat has been delayed, ongoing uncertainty could weigh on Canada’s economy and housing market. The measured approach taken by the Trump administration provides temporary relief, but long-term risks remain.
