UPDATE AS OF FEB. 3, 2025 AT 4:59 P.M. EASTERN: Prime Minister Justin Trudeau says the U.S. tariffs on Canada will be “paused” for 30 days. Read more about the announcement here.
U.S. President Donald Trump’s tariffs on Canada, and Canada’s retaliatory measures, could be the most “significant trade shock” that Canada has suffered in nearly 100 years, economists say.
So does that mean a recession is inevitable?
A Royal Bank of Canada report on Sunday compared the trade shocks from Trump’s tariffs to the ones caused by the Smoot-Hawley tariffs of the 1930s.
The Tariff Act of 1930, which created what’s known as the Smoot-Hawley tariffs, was an American law that raised U.S. tariffs on a sweeping range of products being exported to the United States.
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The tariffs were widely believed to have worsened the recession during the Great Depression.
“This shock far surpasses the 2018 tariffs in magnitude, diminishing the value …