TD Bank: U.S. Auto Tariffs Would Cause a Recession in Canada, Permanently Scar Economy


The imposition of tariffs on autos imported into the U.S. would cause the Canadian economy to stagnate, perhaps extinguishing one in five Ontario manufacturing jobs, according to a new analysis by TD Economics.

Economic growth would be cut by half of a percentage point in 2019 if the U.S. slaps tariffs on auto imports, Brian DePratto, Senior Economist at TD Economics, wrote in a report published Monday. The Canadian economy's growth would come to a standstill for two quarters, according to DePratto. One in ten manufacturing jobs would be at risk.

The most severe impact would be on the province of Ontario, where the Canadian auto sector is concentrated. Economic growth there would drop by two percentage points and one in five manufacturing jobs would be at risk.

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