Economist Warns U.S. Tariffs Are Damaging Domestic Manufacturing Amid Canadian Economic Stagnation
In a striking economic analysis, Pedro Antunes, the Chief Economist for the Conference Board of Canada, has issued a warning that U.S. tariffs are inflicting significant harm on the American manufacturing sector. This caution comes as recent data reveals that Canada's gross domestic product (GDP) remained unchanged in November 2025, signaling a period of economic stagnation and potential contraction in the fourth quarter.
The Dual Impact of Tariff Policies
Antunes emphasized that while tariffs are often implemented with the intention of protecting domestic industries, they can have unintended negative consequences. The U.S. manufacturing sector is experiencing adverse effects from these trade barriers, which may include increased costs for raw materials, disrupted supply chains, and reduced competitiveness in global markets. This insight challenges the conventional narrative that tariffs solely benefit the imposing country's economy.
Meanwhile, Canada's economic performance has hit a standstill. The GDP data for November 2025 shows no growth, with indicators pointing towards a possible decline in the final quarter of the year. This stagnation is partly attributed to a noticeable drop in manufacturing activity, which has been a key driver of the Canadian economy. The simultaneous struggles in both nations highlight the interconnected nature of North American trade and economic health.
Broader Economic Context and Risks
The economist's remarks underscore a broader trend of economic uncertainty. For instance, CN Rail has reported that tariffs have taken a $350 million bite out of its revenues, with uncertainty now labeled as the "biggest risk" for the company. This example illustrates how trade policies can ripple through various sectors, affecting transportation, logistics, and beyond.
Furthermore, the Toronto Stock Exchange (TSX) recently lost over 1,000 points, driven by declines in gold and mining stocks, while U.S. markets also faced downturns. These market movements reflect investor concerns about global economic stability and the impact of protectionist measures.
Implications for Future Policy and Growth
As Canada grapples with stalled GDP growth, policymakers may need to reassess strategies to stimulate the economy. The manufacturing decline, coupled with external pressures from U.S. tariffs, poses challenges for sustained economic recovery. Antunes' analysis suggests that a collaborative approach to trade, rather than restrictive tariffs, could be more beneficial for both nations.
In summary, the warning from the Conference Board of Canada's chief economist serves as a critical reminder of the complex dynamics at play in international trade. The health of the U.S. manufacturing sector is being compromised by its own tariff policies, while Canada faces an economic stall that demands attention and action to foster growth and resilience in the coming months.
