Canada’s job market faces further risk if new threatened tariffs hit businesses already reeling from a year of U.S. tariffs and trade war uncertainty, experts say.
U.S. President Donald Trump announced Monday night that tariffs of 50 per cent will take effect next month, targeting dozens of sectors, including Canada’s dairy and agriculture, alcohol and motor vehicle and parts manufacturing.
The tariffs will also hit hundreds of other Canadian products ranging from clothing to finished wood and paper products, hockey sticks, plants and even dog leashes that may have otherwise been shielded by the terms of the Canada-United States-Mexico Agreement (CUSMA).
If these new tariffs get implemented in 29 days, Canadian sectors that have been specifically targeted could face a drop in demand as those tariffs translate to higher costs for U.S. customers.
“If you look at the list of targeted items — alcohol products, wood products, certain apparel items, hockey sticks, other sporting goods — you just look at those industries in Canada, and yes, there is a risk to jobs,” says John Boscariol, a partner in the international trade and investment law group at McCarthy Tétrault LLP.
“There is a bit of a delay in seeing the impact in terms of job loss, but unfortunately, as the Trump administration continues to pick off each of these sectors, I expect we’re going to see that trend continue.”
Several economists at major Canadian banks, including BMO, CIBC and TD, said in statements Monday that these targeted sectors amount to roughly five per cent of total exports to the U.S., or $30 billion worth of goods, that could face these additional tariffs of up to 50 per cent.
Andrew DiCapua, principal economist at the Canadian Chamber of Commerce, says that amounts to roughly 100,000 jobs, which could be vulnerable to potential layoffs or reduced hours as a result of less demand.
“This is going to hit a number of different sectors, and if you’re making some of these products and you’re not competitive with a 50 per cent tariff, that’s going to put pressure on your operations.”
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“You’re going to be making less, you’re going to have to maybe cut back on hiring, maybe even you will start to see layoffs.”
The unemployment rate in Canada was last recorded at 6.5 per cent in June, according to Statistics Canada. Although there was some growth among youth, thousands more jobs were lost in manufacturing, agriculture and utilities.
Some 61,000 manufacturing jobs have been lost since a recent peak in January 2025, including in December 2025, when Algoma Steel let go 1,000 workers as a direct result of U.S. tariff impacts.
The latest tariff threats could also have a negative impact on Canada’s businesses, even those not directly targeted by them.
That’s because the uncertainty of the trade war, and the off-and-on tariff threats over the past year, have led businesses to slow their productivity until there is a clearer path forward, economists say.
That can sometimes result in less job growth and even job losses.
“These are very, very tough times and it makes it very difficult for future planning,” says Dennis Darby, president and CEO of Canadian Manufacturers and Exporters.
“Companies are holding on: on investment, holding on making production decisions because you don’t know where things are headed.”
A summer economic outlook report from Deloitte, released in June, described Canada’s economy as being “on pause” amid the trade uncertainty, and that most businesses are “in a holding pattern as trade uncertainty and the mid-year review of CUSMA weighs on confidence.”
That report was released several weeks before the new tariff threats were announced by the Trump administration.
Darby says those new threats “just adds to the uncertainty and adds to the fragility of our industrial sector in Canada.”
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