New tariffs announced as part of an escalating trade dispute between the US and Canada could lead to increased costs for consumers on both sides of the border, particularly for cars and homes.
Canadian Prime Minister Mark Carney has imposed retaliatory import taxes on a range of US goods. This follows US President Donald Trump's threat to raise tariffs on Canadian vehicles from 25% to 50% starting 1 January 2027.
Bernard Yaros, lead economist at Oxford Economics, suggests that a 50% tariff on Canadian autos, trucks, and car parts would likely result in higher consumer prices. Similarly, tariffs on construction materials such as steel, aluminium, and wood products, which Canada has now matched at 50% for metals, could increase building costs and potentially push up home prices.
While Canada has also targeted household items like carpets and washing machines, an economist from Capital Economics, Bradley Saunders, believes consumers may turn to domestic alternatives, potentially minimising price rises on these goods. However, the Budget Lab at Yale anticipates marginal increases in furnishing and other household equipment for Americans due to tariffs on lumber and other materials.