Nov 12, 2026
If you were hoping the midterm results in the U.S. would bring quick relief from the trade war, Prime Minister Mark Carney just tempered those expectations.
Speaking in Montreal on Nov. 10, Carney said President Donald Trump’s administration — not Congress — will remain the key decision-maker on trade deals for the next two to three years, despite Democrats’ sweeping wins.
Advertisement
Your household budget will feel it. U.S. tariffs and Canada’s matching counter-tariffs are already showing up in the price of everyday goods, the job market and interest rates. Building your budget around a fast fix could leave you exposed.
Thanks for subscribing!
The best of Money.ca delivered weekly.
By signing up, you accept Money.ca Terms of Use, Subscription Agreement, and Privacy Policy.
Why won’t the midterm results end the tariffs?
A Democratic Congress can’t simply or easily undo Trump’s trade policy on its own. Prime Minister Carney told reporters in Montreal that the U.S. president and his administration, not lawmakers, decide trade agreements. He was responding to Quebec’s plans to reach out to U.S. officials, including governors and senators.
Democrats campaigned on tariffs, blaming U.S. tariffs on Canadian goods for higher prices and pledged to challenge them. Democratic Sen. Ron Wyden has made tariffs on Canada a repeal priority, but Trump could veto any legislation.
That leaves Ottawa in a tough spot. Canada can accept a deal that lowers Trump’s tariffs but keeps some in place, or hold out for free trade while Congress mounts its challenge. Carney said Canada has resolved disputes over French-language protections and Canadian cultural programming that helped derail talks in August, but he was clear the work isn’t done. “There are still some tough issues to resolve with the Americans in this negotiation,” Carney said.
Must Read
- A single line on your car insurance policy could be inflating your premium by up to 30% — here's what to change
- Here are 5 'must-haves' that Canadians constantly overpay for. How many of these are sabotaging your budget every single month?
- Here are the 5 biggest differences between rich and poor Canadians — which side do you fall on?
Join 20,000+ readers and get Money.ca’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
What are tariffs costing Canadians right now?
On Aug. 22, the U.S. imposed a 50% tariff on $27.6 billion worth of Canadian goods. Canada responded on Sept. 8 with counter-tariffs of 15%, 25% or 50% on about $27.6 billion of U.S. imports. Targeted categories include appliances, furniture, clothing, electronics and dairy products.
Inflation is also high, though oil is the bigger driver. Bank of Canada data shows CPI inflation has been around 3% since April and is expected to hit about 3.5% by year end. It also warns that businesses have mostly absorbed higher input costs so far, but expects more of those costs to reach consumers over the next year.
Advertisement
The result: the bank raised its policy rate to 2.5% on Oct. 28, marking the first increase since July 2023. The bank expects growth to slow in the fourth quarter as new U.S. tariffs weigh on activity.
Who feels the pressure most?
The job market in Canada is softening, with unemployment numbers rising to 6.7% in October, its highest level in six months. That followed job losses of 68,000 in September and 42,000 in August.
Three groups face the sharpest squeeze:
- Workers in tariff-exposed sectors such as steel, aluminum and autos, where layoffs or reduced hours are a real risk
- Borrowers on variable-rate mortgages or home equity lines of credit, who feel rate hikes right away, and homeowners renewing in 2027
- Shoppers planning big-ticket purchases of U.S.-made goods that now carry Canadian counter-tariffs
What to do now
Plan for the trade fight to last, and treat any deal as a bonus.
- Budget for 3% inflation, not 2%. The bank expects inflation to stay at or above 3% through much of 2027.
- Before buying furniture, appliances or electronics, compare U.S.-made items with Canadian or other non-U.S. alternatives that aren’t subject to counter-tariffs.
- Stress-test your mortgage. If you’re on a variable rate or renewing soon, ask your lender what your payment would be if rates rise another half to full percentage point. The bank hasn’t ruled out further hikes.
- If you work in a tariff-hit industry, prioritize cash savings, such as a high-interest savings account inside your Tax-Free Savings Account (TFSA), over new debt.
- Trade news can whipsaw markets. A diversified Registered Retirement Savings Plan (RRSP) or TFSA portfolio is built to ride out swings like these.
A trade deal is still possible. Carney says he speaks with Trump regularly and could meet him at upcoming summits. Until then, the safest bet is to assume that today’s costs stick around. The BoC has said it will take future rate decisions one meeting at a time and will proceed carefully. Canadians would be wise to do the same.
You May Also Like
- This 7-step plan from Dave Ramsey is designed to help you ditch debt, save more and build wealth — here’s how it works
- Prioritize these 4 critical investments and watch your net worth skyrocket
- Here are 8 solid money moves that could free up real cash every month — here's where to start
- Millionaires under 43 are reshaping investing — just 25% of their portfolios are in stocks. Here’s where their money is going
The most expensive financial mistakes are often the ones you don't see coming. Join 19,000+ Canadians who get the money moves, risks and opportunities shaping their finances — delivered free each week. Subscribe now.
Leslie Kennedy served as an editor at Thomson Reuters and for Star Media Group, followed by a number of years as a writer and editor and content manager in marketing communications, before returning to her editorial roots. She is a graduate of Humber College’s post-graduate journalism program and has been a professional writer and editor ever since.
