The ongoing tariff discussions between the US and Canada are constantly evolving. These negotiations have the potential to impact everything from goods and services to the grander economic landscape. As these international trade talks continue to develop, it’s important to understand how tariffs work and how they may impact you as a Canadian.
What are Tariffs and How Do They Work?
Tariffs are essentially a tax on imported goods. These taxes increase the prices you and businesses pay for goods and services. As a result, you might notice changes in spending, trade flows, government revenue, and more. Additionally, you might find it harder to find or access key goods and services. It's important to note that although tariffs raise the prices of imports, they are actually paid by domestic consumers like you. In short, it's everyday citizens who are most impacted by tariffs.
How Tariffs Could Impact Your Daily Life in Canada
Cost of Living: If tariffs are imposed, you could potentially see a smaller selection of goods coming from the US. This might lead to an increase in the price of consumer goods, including groceries, appliances, and vehicles.
Employment: Tariffs may also affect key industries such as manufacturing, tourism, and transportation, which could lead to layoffs and an increase in the unemployment rate. With fewer people working and prices rising, the demand for restaurants and entertainment may also decrease.
Mortgage Rates: With the addition of tariffs, investors might gravitate towards the security of fixed-rate mortgages, increasing the demand and price of bonds. If the Bank of Canada cuts its policy rate to combat the impact of tariffs, variable mortgage rates could decrease.
Inflation and Interest Rates: To combat the impact of tariffs, the Bank of Canada might shift its focus to supporting the economy rather than fighting inflation. This could lead to an economy with high inflation and high unemployment.
Investments: The stock market is expected to become volatile and unpredictable in the face of a potential trade war. It's important to diversify your investment assets across various sectors.
What Can Canadians Do Right Now?
Buy Canadian: start supporting Canadian businesses by choosing Canadian goods and services. Check out madeinca.ca for help!
Seek Professional Advice: if you have a mortgage coming up for renewal, or have questions about investments, speak with a professional today.
Avoid Unnecessary Purchases: in these uncertain times, try to hold off on purchases that you don't immediately need .
Tariffs can be a daunting prospect, as they may lead to increased prices for goods and services, changes to rates, investments, and more. The most important thing you can do right now is to stay informed about tariffs and government updates. If you have any questions about how these tariffs may impact your daily life, finances, or future, please contact us at 1.866.446.7001.