If US tariffs on goods and services imported from Canada are rolled out broadly and maintained, immediate changes will be seen in our forecasts for retail sales, ecommerce sales, and cross-border buying. Still, the on-again-off-again trade decisions leave much uncertainty at this stage. In the medium term, we expect our ad spending figures to be lower, based on broader macroeconomic declines resulting from the tariffs.

The impact of a trade war on Canada is especially acute given its deep trading relationship with the US. About three-quarters of Canada’s exports go directly south, and almost two-thirds of imports are from the US. The prospect of an immediate recession is real if a 25% blanket tariff is imposed, which Canada would match dollar for dollar in retaliation. A permanent shrinking of the Canadian economy would result in the worst-case scenario of steep and protracted tariffs.

Consumer sentiment in Canada has shifted dramatically in just a few months. For brands and retailers, meeting this pro-Canada sentiment is an opportunity. The necessity is rebuilding supply and demand channels domestically with stable international trading partners.

Read the full report, FAQ: US-Canada Trade War.