Summit Post
Published: September 09, 2026 at 3:16p.m. EDT iHeartRadio's Bill Carroll says Trump ‘has nothing but those memes’ in the wake of the U.S. banning certain Canadian goods. New U.S. tariffs and trade restrictions on Canadian goods are unlikely to significantly affect Canadian economic growth in the near term, economists said Wednesday. The latest escalation raises the risk of a more prolonged trade conflict, adding uncertainty for Canadian businesses and increasing the odds that the economy could stall or shrink in the fourth quarter.
TD Economics noted that the U.S. response to Ottawa’s counter-tariffs involves three actions: stopping imports of some products, removing tariffs on a few products, and introducing new tariffs. Andrew Hencic, senior economist with TD Bank Group, explained that the U.S. has shifted the focus of tariffs but maintained a similar dollar amount. This shift, however, represents another manifestation of policy uncertainty, affecting U.S. market access concerns and weighing on Canadian firms.
Starting September 15, the U.S. will impose 50 percent tariffs on Canadian goods worth about 0.6 percent of U.S. imports from Canada, while removing 50 percent tariffs on other goods worth about 0.5 percent. New duties will apply to products like outboard motorboats and metal/paper products, while tariffs will be removed from items like cement, sugars, toilet paper, and fishing rods. BMO chief economist Doug Porter described this as a reshuffling of tariffs rather than a net escalation.
The U.S. has also banned imports of certain Canadian goods, including whey, alcoholic beverages, and motorcycles, worth about US$1 billion. Porter noted that while affected sectors will be impacted, others remain unaffected. From a macroeconomic perspective, this development is seen as a wash, with no significant change to the forecast.
However, escalating trade tensions could pose long-term risks to the Canadian economy. Porter warned that prolonged tariffs could lead to further growth cuts. Capital Economics estimated that the U.S. ban on some Canadian goods will have little effect on either economy, but the escalation raises the risk that tariffs could remain in place longer than initially assumed, potentially causing Canadian economic stagnation or contraction in the fourth quarter.
Federal stimulus spending of around US$7.5 billion may mitigate some of this impact. The items removed from the U.S. tariff list are valued at roughly US$1.7 billion, while new targets are worth about the same amount. Cement and switchgear assemblies, which include electrical equipment like circuit breakers and fuses, were among the products removed. Porter suggested these products may play a role in building data centers. Trump’s new import bans will apply to 0.25 percent of Canada’s exports to the U.S., or 0.03 percent of total U.S. imports. His Section 338 tariffs, imposed on a range of Canadian goods starting August 22, affected about five percent of Canada’s exports to the U.S., worth around US$28 billion.
Source: BNN Bloomberg
