Canada’s economic picture has never been bleaker. Nationally, the unemployment rate has shot up to 7.1%—its highest rate in nine years. That’s a 0.5 percentage point increase since January 2023. Canadians are more worried about the rising cost of living than anything else, with concerns growing over the general quality of the economy as well. In light of these issues, Mark Carney, Canada’s Prime Minister, is set to meet with President Donald Trump in Washington, D.C., to discuss tariffs and potentially reshape economic relations between the two nations.
The urgency of Carney’s visit stems from President Trump’s recent threats to impose a 10% tariff on lumber imports from Canada. These tariffs are ostensibly designed to force negotiations on terms for the US-Mexico-Canada Agreement (USMCA). They could have a huge effect on Canadian businesses. As Americans brace for a once-per-decade review of the USMCA, interim outcomes here could affect the fate of that review. In both countries, the stakes are high.
Economic Concerns Rise in Canada
Canadians are at the point of pushing back on any new taxes going against their demand for economic certainty. A recent poll by Abacus Data found quebecois citizens ranked economic issues as their top concern. The increasing unemployment rate adds to this fear. Tens of thousands of other Canadians continue to deal with job loss and rising costs.
Carney’s meeting with Trump should be an informative harbinger as to the future of the USMCA. The final outcome of all new tariffs on softwood and lumber—critical, irreplaceable imports from Canada—remains an open question. Higher tariffs on these goods would only result in higher prices for Canadians. This concern is heightened since many raw materials travel over international borders before being used in final products.
“There is a necessity on the part of the (Canadian) government to shift away from so much of the focus on Trump and being anti-Trump and really think about what they can do to improve the lives of Canadians day-to-day,” – Inu Manak
Implications of Tariffs on Trade
The economic relationship between Canada and the United States is a unique one. Highly interdependent supply chains have real-world implications, affecting pricing and availability of goods in both countries. By increasing the cost of American exports, Trump’s tariffs unnecessarily increase the costs for everyday Canadians by raising the prices of these earnings. Carney intends to raise with Trump the need for newly sectoral tariffs exemptions to be available. These exemptions would be a welcome relief to some of the financial burden.
The last time Carney saw Trump in person was at the G7 leaders’ summit in August. This next meeting may be make-or-break for both countries. The Canadian government is doing all it can to lobby the U.S. administration to repeal or change the tariff policies that strike hardest on Canadian earners.
“It makes a difference to have face-to-face time with Trump,” – Inu Manak
Moving Forward with Negotiations
Both leaders prepare for a serious battle. They’ll take on tariffs and dive into broader economic challenges facing millions of Americans on both sides of the border. At the end of the day, Carney is poised to push pro-Canadian worker policies all while trying to thread the needle on USMCA negotiations.
Against the backdrop of soaring unemployment and increasing economic anxiety, it is more important than ever for both leaders to meet in the middle. The result of this meeting has the potential to very positively mold Canada’s economic future.
