How will the new American administration affect Canadians?
President-elect Donald Trump and his Republican-majority control of the U.S. political landscape could impose some challenges on Canadians.

The recent American election results could profoundly affect Canada, influencing our economy, social policies, and international alliances. For Canadian students and young adults, these shifts are not abstract political changes but realities that could shape their futures. As the new U.S. administration takes office, its policies are poised to bring challenges that Canada must navigate with care, precision, and foresight.

Canada’s economic future

President-elect Donald Trump’s trade policies, rooted in a transactional approach to international agreements, treat trade as a zero-sum game: one nation’s gain comes at the direct expense of another. This philosophy could mean a return to tariffs, like those on steel and aluminum in 2018, which saw the U.S. levy steep duties on Canadian exports. Majority of consumer products are produced and assembled somewhere other than the country the final product will end up in. Think of tariffs as a tax that a country imposes on goods, usually to garner revenue and “protect domestic procedures.” Trade Trump’s recent proposal of a 10% blanket tariff on imports could reignite trade tensions. 

For Canada, a country where 75 per cent of exports are destined for the U.S., such protectionism could have cascading effects. Tariffs on essential goods like steel, lumber, or dairy would not only disrupt industries but also raise prices for consumers. Everyday items — groceries, electronics, or even cars — would become more expensive, directly impacting young Canadians whose budgets are already stretched thin. 

This is particularly concerning as Canada grapples with billions of yearly deficits, bolstered by Canada’s booming immigration. Any retaliatory tariffs or subsidies to counteract U.S. policies would strain federal resources further. Historically, Canada’s response to similar U.S. measures, such as the 2018 tariffs, included dollar-for-dollar counter-tariffs and financial aid for affected sectors. While these measures provided some relief, they also exacerbated budgetary pressures and job losses for Canadian steel and lumber workers, leaving the long-term economic state in precarity. 

But why does this matter? Inflation hits young Canadians hardest because they often lack the savings or financial stability to absorb price increases. Higher costs for basic goods could push more young people into debt or force them to delay milestones like buying homes, starting families, or investing in education. In my opinion, Canada must avoid short-term reactions and focus on systemic solutions that protect consumers while maintaining economic stability. 

The need for sustainable economic policies: Conservative vs. Liberal approaches

The Canadian economy is already under strain. Inflation, housing shortages, and healthcare funding gaps have made the cost of living untenable for many, especially young Canadians. A protectionist U.S. administration will only amplify these challenges, underscoring the need for a robust and sustainable economic strategy. No Canadian party has yet to release an official policy addressing potential U.S. tariffs or retaliatory trade measures, but here are some predictions on the policies that may emerge in response to these pressing economic challenges.

The Conservatives advocate for tax cuts to spur growth, encapsulated in their slogan: “Axe the Tax. Build the Homes. Fix the Budget. Stop the Crime.” These tax cuts aim to not only alleviate financial burdens for individuals but also enhance the much-needed reinvestment of businesses in the Canadian economy. By reducing taxes, the Conservatives hope to foster an environment where businesses can thrive. 

Policies like Bill C-234 aim to reduce financial burdens for farmers, indirectly lowering food prices for consumers. Their housing proposals, which include increasing construction and providing GST exemptions on homes under $1 million, are designed to address affordability. 

While these measures offer relief, their effectiveness hinges on execution. Tax cuts, while beneficial in the short term, can reduce government revenue needed for essential services like healthcare and education. Similarly, housing mandates depend on cooperation with provinces and municipalities, which have varying priorities and capacities. 

The Liberals are likely to emphasize subsidies and direct financial support, as seen during the pandemic. These policies, while providing immediate aid, risk inflating the national deficit further. For example, programs like rent and wage subsidies helped stabilize the economy during COVID-19 but added long-term debt. However, recent adjustments to the Bank of Canada’s interest rates have not significantly improved public trust in the economy. Many Canadians remain skeptical about the effectiveness of these measures, especially as inflation continues to rise. Historical analysis by the Fraser Institute also reveals that “Prime Minister Justin Trudeau is projected to the largest debt-accumulator among prime ministers who did not fight a world war or experience an economic downturn during their tenure.” 

Furthermore, policies such as increasing the capital gains tax may drive further distrust among investors and the public, as they could be seen as exacerbating the already large national deficit. While these policies aim to generate revenue, they risk discouraging investment and economic growth, leading to a cycle of distrust in the government’s fiscal management. 

The challenge for the Liberals lies in balancing short-term relief with long-term sustainability and recuperating public trust. As inflation continues to erode purchasing power, young Canadians need assurances that government spending will not come at the expense of their future security. 

Tariffs will most definitely create a weaker Canadian dollar. The combination of a weaker Canadian dollar and higher import costs could directly impact young Canadians, whose purchasing power is already under pressure. Essentials like groceries and technology, both heavily reliant on imports, would become increasingly unaffordable. Rising transportation costs, driven by higher fuel prices or tariffs on vehicle parts, could further strain budgets. 

The Conservative Party’s proposed tax cuts offer one path to relief, aiming to leave more money in Canadians’ pockets. However, without targeted measures to address inflation and housing, these cuts risk being overshadowed by rising costs elsewhere. Conversely, the Liberals and NDP focus on subsidies and public investments, but their reliance on deficit spending may pose risks to long-term economic stability. 

Young Canadians are particularly vulnerable to these pressures because they are often in transitional life stages: finishing education, starting careers, or building families. A lack of clear, effective policy responses could leave this demographic without the resources needed to navigate these challenges, deepening generational inequities. 

A Test for Leadership 

The potential economic impact of a protectionist U.S. administration adds yet another layer of complexity to Canada’s existing challenges. This moment represents a defining test for Canada’s political leadership. 

One key issue is the upcoming renewal of the United States-Mexico-Canada Agreement (USMCA). The agreement’s significance extends beyond simple trade facilitation, it is a cornerstone of Canada’s economic stability. A cancellation or renegotiation under less favorable terms could severely impact industries like automotive and agriculture, disrupt supply chains, and weaken Canada’s leverage in global trade discussions. This makes the renewal of the USMCA not just a test of diplomatic skill but a litmus test for how well Canadian leaders can secure our economic future. 

As of now, no official policy has been released. The Conservatives must show how their tax cuts will be balanced with funding for essential services and protecting Canada from potential trade disruptions, while the Liberals must exercise fiscal responsibility. 

Young Canadians are not just voters, they are the future workforce, innovators, and leaders. Their economic stability is critical to Canada’s long-term prosperity. For students and young professionals, a stable USMCA ensures access to job opportunities in industries reliant on cross-border trade and supply chains. 

This pivotal moment demands that Canada’s leaders rise to the occasion, providing not just reactive measures but proactive, forward-thinking strategies. 

The potential economic impact of a protectionist U.S. administration adds yet another complex challenge for Canada’s current Liberal government to address. As our economic precarity grows in response to the U.S. election, political leadership must speak to the experiences of everyday Canadians, articulating an actionable plan to genuinely execute partisan promises and foster economic resiliency.  

Young Canadians, who are among the most affected, will be closely watching, seeking leaders who offer tangible, long-term solutions to counteract inflation, secure essential services, and stimulate economic opportunities. We deserve leadership that understands their challenges and works tirelessly to address them. Anything less is not just a political failure—it is a betrayal of the future. Now, more than ever, Canadians need unified leadership that prioritizes stability and prosperity for future generations.