{"id":5500,"date":"2025-12-04T15:00:08","date_gmt":"2025-12-04T15:00:08","guid":{"rendered":""},"modified":"2026-04-02T23:23:05","modified_gmt":"2026-04-02T23:23:05","slug":"tracking-the-impact-of-u-s-tariffs-on-five-targeted-canadian-industries","status":"publish","type":"post","link":"https:\/\/www.rbc.com\/en\/economics\/canadian-analysis\/featured-analysis\/insights\/tracking-the-impact-of-u-s-tariffs-on-five-targeted-canadian-industries\/","title":{"rendered":"Tracking the impact of U.S. tariffs on five targeted Canadian industries\u00a0"},"content":{"rendered":"\n
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With CUSMA exemptions protecting the bulk of Canada-U.S. trade, most U.S. tariff revenue collected on imports from Canada this year have come from product specific (section 232) tariffs, imposed on autos, metals, and softwood lumber.<\/p>\n\n\n\n

This has created a fragmented Canadian economy where a subset of sectors faces a significant trade shock, while most other exports continue to enter the U.S. duty free. Even among the sectors targeted with tariffs, the impacts have been uneven given varying abilities among Canadian exporters and U.S. importers to find alternative international trade partners or domestic sources.  <\/p>\n\n\n\n

It\u2019s still early, but we now have enough data to begin to assess the impact of tariffs on Canadian industries behind key product groups (two-digit harmonized system codes) accounting for more than 80% of U.S. tariffs collected on imports from Canada this year.  <\/p>\n\n\n\n

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Overall, we track moderately lower manufacturing production and employment in most of the highly tariffed sectors in Canada. These trends have also been much less volatile than international trade flow, that were heavily distorted around when tariffs were implemented (as U.S. importers front-ran purchases to build pre-tariff inventories in Q1.)<\/p>\n\n\n\n

Selling prices among Canadian manufacturers have generally held up, with foreign buyers paying the bulk of initial tariff costs, but have led to declining U.S. corporate profits this year. We haven\u2019t seen systemically higher U.S. consumer prices but still expect those will show up more significantly in 2026.<\/p>\n\n\n\n

Here\u2019s a breakdown of how five key Canadian industries have fared in their production, employment and selling prices, amid rising U.S. tariffs.<\/p>\n\n\n\n

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1. Auto manufacturing (29% of U.S. duties collected from Canada 2025 to-date) <\/strong><\/strong><\/h4>\n\n\n\n

Decades of unrestricted Canada-U.S. automotive trade have created deeply integrated supply chains that are difficult to adjust in a short timeframe. Tariffs have increased costs and led to production disruptions, although not as significantly as was earlier feared.<\/p>\n\n\n\n

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