US Section 338 Tariffs and Canadian Retaliation to Weigh on Canada’s GDP Growth

New tariffs under Section 338 by the United States, along with Canada's retaliatory measures, are projected to slow Canadian GDP growth. According to FX Street, these combined trade actions are expected to reduce Canada’s economic expansion by approximately 0.3 percentage points by 2027.

The impact on growth is anticipated to be most significant in late 2026, signaling near-term challenges for the Canadian economy. TD Securities analyst Robert Both highlights the concentrated timing of these effects, emphasizing the importance of monitoring trade developments closely.

For Japanese investors, these developments underline the potential ripple effects in North American markets, which could influence currency and equity movements relevant to Japan’s export-driven economy.