US Tariffs Under USMCA Create Uneven Economic Impact
While the USMCA keeps most goods tariff-free, the United States has imposed targeted tariffs on specific sectors: 15-50% on steel, aluminum, and copper, and 25% on vehicles.
"These tariffs affect different parts of the economy and regions unevenly."
Economist Kronick noted that auto hubs like Brampton and Windsor are experiencing more acute impacts due to their reliance on cross-border supply chains.
Ottawa is currently negotiating with the US to reduce these sectoral tariffs as part of a USMCA review, though no deal has been reached yet.
Businesses need clarity on the final tariff rates to adapt, Kronick warned.
Structural Challenges and Strengths
Beyond tariffs, Kronick identified ongoing structural issues in Canada's economy:
- Interprovincial trade barriers remain a drag on productivity
- The tax system is "uncompetitive" compared to peer nations
However, Canada maintains key advantages:
"A well-educated population and abundant resources remain significant strengths for Canada's long-term competitiveness."