Markets 
As new U.S. tariffs sink into the Canadian economy, the idea of a prolonged trade war is something Canadians will need to get used to — even after President Donald Trump leaves office, experts say.
“I don’t see this changing any time soon. I don’t think this goes away magically when Trump exits the White House, and so for Canada, it’s wishful thinking to think we can hold our breaths and white-knuckle it for the next 24 or 26 months,” says political science associate professor Aaron Ettinger of Carleton University.
“Canada needs to be prepared for a tariff regime coming from the United States that continues beyond the Trump administration.”
Trump’s new 50 per cent tariffs took effect over the weekend after Canada walked away from the negotiating table. Prime Minister Mark Carney said the trade talks broke apart because the U.S. was asking for too much while offering little in return, including restrictions on who Canada can trade with.
For over a year of off-and-on tariff policies and trade negotiations, many Canadians and businesses have been clouded by a sense of uncertainty for what the future holds for the economy.
A report from Deloitte in July suggested Canada’s economy was “on pause” and waiting for a clearer path, with businesses hesitant to invest in expanding their operations and hiring new workers.
On Tuesday, Industry Minister Mélanie Joly announced a round of additional financial support measures for Canada’s small businesses in the wake of these new tariffs, and that some would be available even after Trump leaves the White House.
Get daily National news
Get daily Canada news delivered to your inbox so you’ll never miss the day’s top stories.
“The other way we’ll be able to help a lot of our small businesses is through the BDC, which will have $500 million to support through interest-free loans that will be between $250,000 to up to $5 million. And there will be no repayment, no capital actually to pay back to the BDC for the next 36 months — so after the Trump administration,” Joly said.
“What businesses will need to show is they only need to show that their cash flow will be impacted by the tariffs.”
Trump is currently serving his second and final term as president of the United States, which concludes in January 2029, with midterm elections to be held this fall. Trump will still hold office as president after the midterm elections, but the divide of power between Republicans and Democrats in the House of Representatives and the U.S. Senate could change.
“A Democratic-controlled Congress could try to rein Trump in by adjusting the laws or repealing the laws, but that would require Trump’s signature, and he would just veto anything that constrains his own power.”
This means even if the Republican Party loses control of both the House and the Senate in the fall, Trump may still be able to maintain most of the current tariff policies.
In November 2028, Americans will cast ballots to determine a new president to replace Trump in 2029, which is when things could change.
“It’d be very easy for any subsequent president to use the legislation that Trump has used to impose these tariffs to get rid of them probably literally overnight with a stroke of a pen,” says Prof. Asa McKercher, Hudson Chair in Canada-U.S. Relations at the Brian Moroney Institute at St. Francis Xavier University.
Although a new president could theoretically do away with Trump’s tariff policies relatively quickly, unravelling how those policies will have become rooted in the economy over several years could take much longer.
“Businesses on both sides of the border have already adapted to the tariff system. They have readjusted their business practices, found new markets and so on and so forth. Reversing that all at once is unrealistic, and in any event, it would take a long lead time to adapt properly to a more free-trade system as we had before Donald Trump came to office,” Ettinger says.
“We can’t just expect that Trump goes away, we snap our fingers, and everything returns to a pre-Trump status quo. These tariffs are going to have cascading effects and echoing effects all down the line, even if the Republican Party loses Congress in 2026 or Trump is out of the White House in 2028/2029.”
Read the full article here
