Tariffs, Trump, and Canadian Immigration: What Newcomers Should Know About U.S./Canadian Relations

Unfortunately, global politics are about to have a very real impact on Canada’s economy. And Canada’s immigration policy is very sensitive to Canada’s economic outcomes. So, we’re sharing some hard news today to help you make sense of what’s happening in the U.S., and how far the impacts may ripple in Canada. We’ll also share what you can do to support Canada during this time.   

Key Takeaways

• A tariff is a tax on imported goods, making them more expensive to encourage local purchases. 
• U.S. Tariffs (imposed under Trump) increase costs for U.S. businesses, indirectly affecting Canada. 
• Canadian Counter-Tariffs directly impact prices in Canada, as businesses must pay more for U.S. imports.
• To help manage any cost of goods increase and support the Canadian economy, look out for ‘Made in Canada’ products, where possible.  

What is a Tariff?  

A tariff is a tax that a country puts on goods coming in from other countries. They’re typically a tool that governments use to make imported products more expensive. This is usually done to encourage people to buy locally produced goods, but they can be used for other reasons – such as trying to force other countries to change their policies.  

A key takeaway is that tariffs can make everyday items cost more for consumers.  

Untangling U.S. Tariffs From Canadian Counter-Tariffs 

It’s important to note that Trump’s tariffs don’t have a direct, immediate impact on the prices in the Canadian economy. Only U.S. businesses will directly pay those costs.  

The impact is indirect.  

Because it costs U.S. businesses more to do business with Canada, they will make different decisions and move away from Canadian products where cheaper alternatives exist. This means that Canadian businesses need to either find different buyers or reduce their supply, both of which can result in fewer jobs in Canada.  

The counter-tariffs that Canada has imposed on the U.S. will have a direct impact on prices though. This is because Canada’s government charges Canadian businesses more to import these goods.  

What Items May Become More Expensive in Canada? 

The specific list is very long but, broadly includes alcohol, certain food products including peanut butter, coffee and orange juice, and appliances.  

“The first phase of our response will include tariffs on $30 billion in goods imported from the U.S., effective February 4, 2025, when the U.S. tariffs are applied. The list includes products such as orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and pulp and paper. A detailed list of these goods will be made available shortly.” 

And the list is likely to get even longer. Canada’s counter-tariffs are being rolled out in two stages – the initial 30-billion-dollar package outlined above. There will be a second, larger round impacting around 155 billion dollars’ worth of products, but this won’t be rolled out until Canada’s public has had a chance to comment.  

You can find the full list of items that will be tariffed in Canada’s announcement. 

What Other Impacts Might The Tariffs Have on Canada’s Economy? 

There are multiple other impacts that the tariffs may have on the economy. This includes:  

Short Term Impacts 

• Certain foods and other products may be less readily available in Canada.  

• U.S. alcohol has been pulled from the shelves across most of Canada.  

• Certain products are going to be more expensive, likely by around 25%.  

• It’s possible that we will see the government roll out stimulus packages. This would likely look like the government giving Canadian residents money (which is another reason you should make sure you file your taxes each year!).  

Mid- To Long-Term Impacts 

• Higher unemployment, which could be linked to lower immigration levels though we don’t expect this to impact the November Immigration Levels Plan for 2026-2028 at this point. 

• Potential for lower interest rates, which would ease costs for variable mortgage holders and those looking to buy a home.  

• Some reshoring and offshoring. Some businesses may elect to take the U.S. out of their supply chain, depending on the U.S. market size, and may try to bring manufacturing and/or warehousing to Canada. Others may elect to move manufacturing from Canada to the U.S. to avoid the tariffs, which would decrease employment in certain sectors.  

How To Support Canada and Canadian Businesses 

Fortunately, Canadian businesses are likely to make it easier for you to support Canadian made products. It’s probable that you’re going to see larger ‘Canadian-made’ notices in your grocery store.  

You can also search for and support small local businesses. Canada has an incredible market for everything from soaps and cosmetics to clothing, and everything in between. But an issue is that Canadian goods do tend to be more expensive. So, essentially you may be asked to put your money where your values are in the short term.  

Now, that’s not possible for everyone. There are so many Canadians, and Canadian newcomers, who are living paycheck-to-paycheck. And being asked to pay more for daily goods is no small ask.  

So, what can you do?  

We think it’s important to consider that your dollar going towards Canadian goods right now sends a strong message and can help to keep Canadian workers in their jobs.  

Here’s a great website our team member Rachel came across: MadeinCanada.ca. It contains a great list of goods that you can buy to support Canadian businesses.  

Tips For Cutting Costs Amidst Tariffs 

But it’s also important to remember that carrying debt during uncertain times can increase stress, so it’s equally important to manage your spending.  

In the short term, we suggest reviewing your budget and seeing where you can cut back on spending. This is especially important if you don’t have an emergency fund or if you’re living paycheck-to-paycheck. Common areas to look for savings are transportation, utilities, subscriptions and subscription services, home and auto insurance.  

Your tax return might also provide some relief if you contributed to your RRSP or FHSA and/or you’re expecting a refund this year.