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Trump’s Tariffs on Canada and Mexico Raise Recession Fears

Economists warn of significant economic consequences as the largest North American trade shock in nearly a century takes effect.

WASHINGTON, DC - MARCH 03: U.S. President Donald Trump, accompanied by Taiwan Semiconductor Manufacturing Company (TSMC) CEO C.C. Wei (R), speaks in the Roosevelt Room of the White House on March 3, 2025 in Washington, DC. Trump announced that Taiwan Semiconductor Manufacturing Company, one of the largest manufacturers of semiconductor chips, plans to invest $100 billion in new manufacturing facilities in the United States. (Photo by Andrew Harnik/Getty Images)
A still from the 1986 film 'Ferris Bueller's Day Off'

Overview

  • President Donald Trump has implemented sweeping tariffs, including a 25% increase on imports from Canada and Mexico, marking the largest trade disruption since the 1930s.
  • The tariffs have prompted comparisons to the Smoot-Hawley Tariff Act of 1930, which worsened the Great Depression, as highlighted in a viral clip from the film 'Ferris Bueller’s Day Off.'
  • Economists predict the tariffs could push Canada into a recession within six months, with significant impacts on the manufacturing, energy, and food sectors.
  • The Royal Bank of Canada estimates the tariffs will quadruple average import duties to nearly 12%, causing severe supply chain disruptions and economic contraction.
  • Experts also anticipate higher inflation in the U.S. and job losses in Canada, with Ontario and Quebec expected to bear the brunt of the economic fallout.