Canada’s ambassador warns Trump tariffs are driving up costs, threatening U.S. investment
Canada’s ambassador to the U.S. warns that Trump-era tariffs are raising the cost of capital and deterring business expansion, with Fed research signaling more consumer price increases ahead. He argues that greater policy uncertainty discourages building plants, ships, or investing in R&D, at a time when Washington and Ottawa are attempting to resolve a tariff dispute that has dragged on trade and investment. Negotiations resumed after August talks, but tariffs on Canadian steel and autos remain a flashpoint, complicating long-term planning for companies on both sides of the border. The outlook hinges on whether tariffs can be reduced or removed, shaping investment incentives and transborder commerce in the near term. The broader regulatory environment in Europe also underscores systemic cost pressures for global businesses.
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Ambassador Mark Wiseman highlighted that uncertainty from tariffs increases the cost of capital and discourages long-term investments like new plants, ships, or R&D projects.
Trade between the U.S. and Canada totaled roughly $570 billion in the first nine months of 2026, up from the same period in 2025 but below pre-2023 levels, reflecting a mixed trajectory in bilateral commerce.
U.S. customs duties on Canadian imports reached $10 billion in 2025, a sharp rise from $400 million in 2024, illustrating the scale of the tariff impact on trade flows.
A New York Fed study found that about 90% of tariff costs were passed to U.S. importers, with roughly a quarter of tariff increases expected to hit consumer prices and continue into 2027.
Wiseman urged the removal of Section 232 and 338 tariffs to enable longer-term investment decisions and stressed that a resolution would benefit business certainty, calling for decisive action soon.
Negotiations between the U.S. and Canada resumed after August collapses, focusing on reducing tariffs on Canadian steel and automobiles, while broader political dynamics in Congress add uncertainty to outcomes.