Trump Tariffs Raise Investment Costs, Canada Envoy Warns
The trump tariffs at the centre of the trade dispute between the United States and Canada are doing damage that never shows up on a customs form, according to Canada’s ambassador to Washington. Speaking to business leaders in the American capital on November 11, Mark Wiseman warned that President Donald Trump’s tariffs are raising the cost of investing and making companies more hesitant to build, expand and hire. His message was not about a single shipment or a single duty. It was about the decisions companies make years before a product ever crosses the border, and about how uncertainty over the rules can quietly freeze those decisions in place.
Wiseman delivered the warning at the B20 summit, a gathering of global business leaders hosted by the U.S. Chamber of Commerce in Washington. His central point was simple and direct. “Uncertainty increases your cost of capital,” he said. “If you’re going to build a new plant, add a new ship, spend money on R&D, the more certainty you have, the more likely you’re going to do that.” The remark captured the argument Canada has been making for months: that tariffs are not simply a charge on imports, but a factor in deciding whether a project makes economic sense at all. Wiseman, who arrived in Washington as ambassador in February 2026 after leading the Canada Pension Plan Investment Board and holding senior roles at BlackRock, spoke with the authority of an investment professional, not just a diplomat. His remarks were an appeal for stability, not an announcement that Washington had agreed to remove its duties.
The warning landed against a striking backdrop. New figures from the U.S. Census Bureau showed approximately 570 billion dollars in goods moving between the two neighbours during the first nine months of 2026, a reminder that the United States and Canada remain each other’s most important trading partners even as the dispute deepens. The volume is enormous, but Wiseman’s point was that the dispute is reaching beyond import bills into decisions about factories, research, jobs and where businesses choose to expand.
Trump Tariffs: What the $570 Billion Trade Figure Shows
The tariff news begins with the scale of the relationship itself. According to the U.S. Census Bureau, American exports of goods to Canada totalled approximately 265.9 billion dollars from January through September 2026. U.S. imports of Canadian goods reached about 304.6 billion dollars over the same period. Together, those flows amounted to roughly 570.4 billion dollars. The figure covers nine months, not the full calendar year, and it excludes services such as tourism, consulting and financial activities, so treating it as an annual total would understate the relationship’s actual scale.
The two-way goods total exceeded the comparable period of 2025, although particularly strong trade does not mean tariffs are harmless. Canadian oil, automotive components, machinery and other products continue to supply American customers, while Canadian manufacturers and households buy substantial amounts from U.S. businesses. The Census figures also show an American goods deficit with Canada of about 38.7 billion dollars over those nine months. Trade balances measure flows, however, not the value of jobs, investment or reliable access to neighbouring suppliers. That distinction sits at the heart of Wiseman’s argument: a border can keep moving goods while the investment that sustains it quietly slows, because the two things respond to different pressures on different timetables.
Tariff News: Duties Jumped From $400 Million to $10 Billion
The change in the cost of crossing the border has been dramatic. A Congressional Research Service report found that calculated U.S. duties on Canadian imports jumped from approximately 400 million dollars in 2024 to 10 billion dollars in 2025. The charges applied to about 15 percent of imports from Canada by value. Most qualifying goods still entered duty-free, but industries facing restrictions experienced a much harsher environment. The tariff dispute changes the framework built under successive North American trade agreements, and the speed of the change is part of what businesses find hardest to plan around.
The Bank of Canada estimated in October 2026 that the average U.S. tariff rate on Canadian goods had increased to 7.5 percent, compared with 5.0 percent in July. It also estimated that approximately 80 percent of Canadian goods exports to the United States remained tariff-free. That distinction matters, because this is not a universal tax on everything crossing the border. Some products face severe sectoral or additional duties, while others retain preferential access. Trump has set tariffs as high as 50 percent on select Canadian products, prompting countermeasures from Ottawa that hit U.S. exports worth billions of dollars. Canada has answered Washington’s measures with its own counter-tariffs, adding another layer of costs and uncertainty for businesses on both sides.
Wiseman urged the removal of duties imposed under Sections 232 and 338 of U.S. trade law, measures that target particular industries and products even while much of the broader Canada-U.S. trade relationship remains tariff-free. His argument was that the targeted duties are precisely the ones that distort investment decisions, because they fall on the industries where long-term capital commitments matter most. For companies weighing a factory that will operate for twenty years, a temporary reprieve is not the same as a durable rule.
How Tariffs Impact on Prices Reaches American Shoppers
The burden of the trump tariffs does not fall where many Americans might expect. Tariffs collected at American ports are paid by importers, not by foreign governments. A February 2026 analysis by Federal Reserve Bank of New York researchers estimated that nearly 90 percent of the economic burden of U.S. tariffs imposed in 2025 fell on American firms and consumers. Foreign suppliers sometimes lower their prices, but the research found they absorbed relatively little of the increase. This is the core of Canada’s argument that the damage crosses the border, and it is why Wiseman’s warning was aimed as much at an American audience as at a Canadian one.
Separate New York Fed research estimated that about 26 percent of a tariff increase ultimately passes through to consumer-goods prices. Much of that effect comes from more expensive imported products, but domestic goods become costlier too when factories use tariffed materials or face less price competition. Indirect increases can take nine to twelve months to spread through the economy, and the researchers also expect additional upward pressure on prices in 2027, which means the tariffs impact on prices is still working its way through the economy rather than already fully felt.
Auto Plants and Cabinet Makers Feel the Freeze
Nowhere is the investment dilemma clearer than in the auto industry, where production depends on parts and vehicles moving across the border again and again. Government figures indicate that more than 90 percent of Canadian-made vehicles and 60 percent of Canadian-made auto parts are exported to the United States. In Ontario, automotive manufacturing supports more than 95,000 workers, and the province shipped approximately 60 billion Canadian dollars in vehicles and parts to the American market in 2025. That integration makes tariffs consequential for plants and suppliers in a way that a simple import tax on finished goods never would be.
Brampton, Ontario, offers a concrete reminder of what is at stake. Stellantis halted work on its idled Ontario assembly plant and moved planned Jeep Compass production to Illinois amid the trade conflict. In November 2026, it agreed to sell the Brampton site to Canadian defence manufacturer Roshel, prompting concern over workers’ futures. Corporate decisions have multiple causes, and tariffs cannot explain every change. Still, a plant that once represented years of expected automotive employment illustrates why governments and unions watch cross-border investment decisions so closely. When a manufacturer shifts production, the jobs, the suppliers and the surrounding community all feel the decision, and reversing it is far harder than making it.
The pressure extends beyond automakers. Steel, aluminum, wood products and other manufacturers are also exposed to shifting U.S. trade restrictions, and smaller suppliers cannot easily spread costs across factories or markets, making changes particularly difficult. Canadian cabinet makers provide a stark example. Reuters reported in November that the industry employed nearly 25,000 people and had already lost more than a tenth of its workforce. Quebec manufacturer Cabico, once heavily dependent on U.S. buyers, reported a 25 percent decline in shipments and significant layoffs. A U.S. tariff on certain cabinet products was scheduled to rise from 25 percent to 50 percent on January 1, 2027, and the prospect gives businesses reason to reconsider hiring and expansion before it takes effect.
The Cost to Canada’s Economy Could Last for Years
The Bank of Canada’s third-quarter 2026 Business Outlook Survey offers evidence that the concern is more than theoretical. Investment intentions generally remained resilient, particularly where demand was strong. Yet responses gathered after Canada-U.S. trade talks broke down on August 21 pointed to weaker sentiment and more pressure on investment plans. The response varied, but the uncertainty was measurable, and it was concentrated in the period after the talks collapsed.
The Parliamentary Budget Officer put a longer-term price on the dispute in October 2026. The office estimated that trade measures introduced since early 2025 could leave Canada’s real gross domestic product 1.4 percent lower after five years than it would have been under a pre-tariff trade baseline. If tariffs remain permanent, the PBO also estimated employment could fall by as many as 185,000 jobs at the peak effect. These are modelled differences from a hypothetical no-tariff path, not jobs already counted as lost, but they show the scale of what is at stake: a deferred factory upgrade can mean fewer construction contracts now, less advanced equipment later and slower productivity growth over time.
What Happens Next for US-Canada Trade Talks
Ottawa and Washington resumed discussions after negotiations broke down in August, with steel and automobile tariffs among the central issues. Wiseman urged the removal of the duties imposed under Sections 232 and 338 of U.S. trade law, and the talks are continuing. But the negotiations still have not produced a comprehensive tariff settlement, and businesses are watching for something more durable than a single headline. For companies considering investments lasting decades, the real test is not a favourable statement from one round of talks, but whether any deal produces rules they can rely on.
Politics shifted after November’s U.S. midterm elections. Democrats have signalled plans to challenge Trump’s tariffs in Congress, but Prime Minister Mark Carney has emphasized that the Trump administration remains Canada’s principal negotiating counterpart. The Canada-United States-Mexico Agreement review adds further uncertainty about future market access. For companies considering investments lasting decades, the real test is not a favourable statement from one round of talks, but whether any deal produces rules they can rely on.
Canada is also trying to compete for investment while diversifying its trade. Ottawa is making domestic investment more attractive as the American market becomes less predictable. Canada’s 2026 budget highlights a Productivity Mega Deduction that allows immediate tax deductions for a broader range of qualifying capital investments. Ottawa estimates the measure will reduce Canada’s marginal effective tax rate on new investment to 6.4 percent, versus 16.9 percent in the U.S. Those figures describe a modelled tax burden on an additional investment, not the headline corporate income-tax rate. Carney’s government says it wants to double Canadian exports to markets beyond the United States over the next decade, but building customer relationships and supply chains takes time.
Wiseman’s central message is therefore straightforward: dependable trade rules could unlock investment on both sides of the border more effectively than repeated uncertainty. Whether the relationship keeps working depends less on any single tariff rate than on whether businesses believe the rules will still be there when their investments mature. That is the case Canada’s ambassador made in Washington, and it is the question the next round of talks will have to answer.
Source: CNBC