New U.S. tariffs are narrowly targeted
6 Video Views·Jul 27, 2026
U.S. President Donald Trump's latest threat to impose 50 per cent tariffs on a wide swath of Canadian goods is more narrowly targeted than first feared, argues Royce Mendes, head of macro strategy at Desjardins. He sees the new tariffs as part of an intensifying negotiations strategy ahead of U.S. midterm elections in the fall. (July 21, 2026)
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Video Summary
AI GeneratedThe announcement of a 50% tariff on certain Canadian goods marks a significant escalation in US-Canada trade tensions. While the tariffs are targeted—affecting only about 5% of exports—the primary danger lies in the resulting business uncertainty and the potential for negative knock-on effects on household job security as part of a broader negotiation strategy.
Well, I think the most shocking part of this tariff announcement is really the headline
number, 50%, and it includes items that are KUSMA compliant, which is a market escalation
in the trade tensions between Canada and the US.
That being said, when you look at what's being covered, what we calculate is that it's just
over about 5% of what heads to the US, and so it's certainly not broad-based in nature.
It's more targeted.
The business confidence channel is really the key part of this, because the overall
tariffs that have been announced are not broad-based, and so if they went into effect, yes, they
would be very painful for specific sectors and specific regions, however, they would
be only incrementally more painful than the tariffs that have already been levered.
What's really difficult here is that we are going through another phase of uncertainty
for businesses, which will then have knock-on effects for households who are worried about
their job prospects, and so we've identified previously that this was likely going to happen.
This is very much in line with Trump's signature strategy of trying to deploy maximum leverage
on negotiating partners in order to generate some concessions.
Trump administration has the midterm elections on the horizon.
The Canadian economy has been operating under this cloud of uncertainty for so long.
Both sides would like to eventually come to some sort of resolution, even if it's only
a partial resolution, but before we get there, I think there could be a further deterioration
even from this point going forward, just over the next weeks or even next few months.