Donald Trump has said America is being “ripped off by every country in the world, friend and foe” and liberation day, as he calls it, is when he aims to set that right.

On April 2 the United States president plans to impose reciprocal tariffs on all trading partners as retribution for existing duties and other barriers.

“April 2 is liberation day for our country because we’re finally going to be taking in money,” Trump said last week.

Canada and the world were shocked when Trump singled out his closest allies for tariffs in January. On April 2 the trade war is expected to widen, and that may actually help Canada, said Avery Shenfeld, chief economist of CIBC Capital Markets.

In this case, “misery loves company,” he said.  “Both the impacts on our exports to the U.S., as well as our odds of negotiating these tariffs down to a manageable size, would be improved by having many other U.S. trading partners in the same boat.”

The damage to Canada’s share of the U.S. market will be reduced if imports from other countries are also facing tariffs, said the economist.

Canada will end up on a more level playing field, rather than the competitive disadvantage it faces if its products are penalized and those of other countries are not.

The benefit would be greater in sectors which are dominated by foreign suppliers such as fishing, base metal manufacturing and mining.

If other countries push back at Trump’s new duties with their own or boycott American exports, they may turn to Canada to replace those supplies, opening new markets in Europe and Asia.

“Negotiating a cooling in tariff levels will also be easier if our misery is shared by other countries facing new U.S. tariffs,” said Shenfeld.

Canadian retaliatory tariffs on the United States and its Buy Canada movement will hurt American companies, which in turn will lobby the White House for a settlement, he said.

If Europe and Asia respond with duties and boycotts of their own it will ramp up the pressure and U.S. consumers will join the outcry when tariffs push inflation even higher.

There is a chance President Trump will think he needs to leave some hefty duties in place even after negotiations to fulfill election promises, said Shenfeld.

“Perhaps some elevated tariffs on other countries that have greater barriers to U.S. goods will help meet that political need, leaving more elbow room for Canada to escape some of the Administration’s protectionist wrath,” he said.

“Unless, of course, the President is really set on having his 51st state.”

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Population growth, which for the past three years has topped what Canada could handle, is slipping back to more normal levels, recent data showed.

Gains in the first quarter slowed to 63,000, the lowest since the first quarter of 2021 when immigration was still on lockdown because of the pandemic.

As today’s chart shows, population growth per construction unit has returned to its 1981-2019 historical average.

National Bank of Canada economists Matthieu Arseneau and Daren King say that’s a step in the right direction, but not enough to correct the imbalance built up during the population boom.

To reduce the housing shortage and improve housing affordability, population growth would have to be below the usual ratio for some time, they said. A significant increase in homebuilding could even things out, but trade uncertainty threatens those efforts.

“Given these conditions, further slowing population growth will be necessary to help mitigate the housing shortage,” said Arseneau and King.

• The leaders of the four federal political parties hit the campaign trail after the election was called Sunday. Trade and how they will deal with President Trump will be top issues.
• Hudson’s Bay liquidation sales are set to start today as the company looks to close all but six of its stores.
• Air Canada CEO Michael Rousseau speaks on the airline’s vision for the future at Canadian Club Toronto.
• Today’s Data: Chicago Fed net activity index

• From tariffs to taxes to foreign worker shortages: These are the issues small businesses are grappling with today
• Cadillac Fairview loaned Hudson’s Bay $200 million in 2023 to keep it afloat as anchor tenant
  

If you owe money to the Canada Revenue Agency, it’s pretty hard to avoid paying up — even if it’s your spouse or partner that owes the CRA money. Tax expert Jamie Golombek explains how, depending on the circumstances, you could be held personally liable for paying your spouse’s tax debts as a case showed this month.

Is the trade war having an effect on your finances? Are you making different decisions about your spending or saving habits? Is it changing your retirement math or portfolio construction? Do you see bigger plans like buying a house or starting a family slipping through your fingers? If yes, drop us a line at wealth@postmedia.com with your contact info and we’ll find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course).

McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his mortgage rate page for Canada’s lowest national mortgage rates, updated daily.

Financial Post on YouTube

Visit the Financial Post’s YouTube channel for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.

Today’s Posthaste was written by Pamela Heaven, with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com.

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