Latest US Tariffs Threats to Create Uneven Effects Across Sectors of Canada's Economy, National Bank Says
Last week's US tariff threats would raise Canada's export tariff burden, but their impact remains uneven across industries and regions, National Bank of Canada said in a Wednesday note.A broad tariff increase doesn't imply an equally large impact across all sectors, as exemptions for many Canadian natural resource exports mean the national average understates where the economic effects are likely to be concentrated, said National Bank."The proposed measures would concentrate the tariff shock on a group of manufacturing industries," wrote the bank's strategist Ethan Currie and Deputy Chief Economist Matthieu Arseneau in the note.Apparel and textiles, non-metallic minerals, and electrical equipment would face larger effective tariff increases than primary metals and fabricated metal products, which are already subject to trade restrictions, National Bank added. The regional impact would also vary, with Central Canada, British Columbia, and Nova Scotia likely to see the largest increases due to differences in export exposure and industrial composition.Targeted trade barriers could still weigh on exposed sectors and regions, reducing exports, investment, and market share despite Canada's relatively low overall tariff burden, the bank said.The one-month implementation delay suggests tariff threats from the United States may be part of a broader negotiating strategy, but risks to vulnerable industries remain. Renewed trade uncertainty could weigh on Canadian business confidence and export sentiment, according to National Bank.
