Is the U.S.-Canada trade war overblown? – Bloomberg Is the U.S.-Canada trade war overblown? – Bloomberg

Since U.S. President Donald Trump imposed tariffs on Canada early last year, the relationship between the two countries has been strained and precarious. As Prime Minister Mark Carney seeks to diversify the country’s international trade, many Canadians are avoiding American products on grocery store shelves as well as travel south of the border, and both exports to and imports from the United States are down. Canada’s real GDP contracted in two of four quarters in 2025, with total growth for the year just 1.7% — the slowest pace since the impact of the COVID-19 pandemic in 2020.

“We’re all going to lose around 2% of our GDP because of the new trade environment. That includes the United States,” Osler Special Advisor and former Governor of the Bank of Canada Stephen Poloz tells Bloomberg. “When I say 2%, for somebody, that’s 100% of their livelihood.”

Much of that impact is being felt in sectors like automotive, forestry, copper, aluminum and steel.

“These are sectors that are deemed really strategically important,” Stephen explains.

Amid the ongoing trade uncertainty, many business leaders are taking a “wait-and-see” approach.

“[CEOs] remain very cautious, I would say,” Stephen says. “In areas where trade matters the most, they’re essentially still frozen. They’re the type who would be just doing, ‘keep the lights on, do our maintenance spend, and keep our powder dry.’”

The Canada-United States-Mexico Agreement (CUSMA) is up for review this summer, and it’s unclear what the next version of that agreement might look like.

“We’ll see how the CUSMA, or USMCA, renegotiations go. But frankly, they could go nowhere.”

You can watch the full segment on the Bloomberg website.