Will Tariffs Impact Canada’s Economy and the Stock Market?

2 min read | January 31, 2025 11:24 AM EST | By Team Kalkine Media

Will Tariffs Impact Canada’s Economy and the Stock Market? — Image source: Shutterstock

Economic Concerns Surrounding Trade Duties

A major factor influencing market sentiment is Trump's self-imposed deadline for February 1, which could bring significant trade duties against several nations, including Canada. The impending tariffs have created uncertainty as companies, consumers, and farmers across both the U.S. and Canada brace for possible disruptions in cross-border trade. This could affect approximately $1.6 trillion in annual trade, with both economies potentially facing broader repercussions.

Canadian Dollar Shows Slight Increase

The Canadian dollar saw a modest gain early on Friday, edging up by a small margin against the U.S. dollar. While the change was minor, it highlights the overall fluctuations that the currency is experiencing as the deadline for the tariffs nears. The movements in the Canadian dollar reflect the broader economic anxieties surrounding the unresolved trade dispute.

Economic Activity Reflects Contraction in November

On the macroeconomic front, Canada’s GDP showed a decline in November. The decrease in economic activity affected both the service-producing and goods-producing industries. While this may suggest some slowing in the economy, it is important to note that this represents a specific time frame, and broader trends may emerge as further economic data becomes available.

Leadership Change at Algonquin Power

Algonquin Power (TSX:AQN) announced a leadership change with Rod West set to succeed Chris Huskilson as the company’s new CEO in early March. This transition comes at a time when businesses are closely watching the broader economic environment, particularly given the uncertainty surrounding the trade dispute and its potential impact on energy markets.

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