Sep 29, 2026
If there’s one thing U.S. President Trump is known for, it’s his penchant for quotable, if oftentimes vitriolic impromptu musings on any given topic.
That was on full display during a Sept. 28 Oval Office event about the U.S. steel industry, wherein Trump decried Canada as being “one of the worst countries in the entire world.” He prefaced that barb by saying how Canada has “treated the United States very unfairly.”
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His off-the-cuff commentary lands as Prime Minister Mark Carney looks to further strengthen the nation’s international ties, including welcoming an invitation to become the European Union’s first associate member, a prospect Trump suggested could be a “hostile act.”
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Trump’s affronts won’t show up on your credit card statement or shape your budget spreadsheets — however, the tariffs behind them might.
A 50% U.S. tariff on $27.6 billion of Canadian goods took effect Aug. 22, which Canada matched “dollar for dollar, rate for rate” on Sept. 8. The U.S. has also implemented a $1 billion ban on certain Canadian imports, including liquor and dairy products, as well as motorcycles.
In the midst of all economic uncertainty, it’s important to keep your finances in order and separate the chaos from the clarity. Here’s where the trade war could reach your wallet, and what to do about it.
What’s getting more expensive?
Since Sept. 8, Canada has applied counter-tariffs of 15%, 25% and 50% on U.S. products in sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper and electronics. U.S. furniture, clothing and apparel face the top 50% rate, while appliances and dairy products such as cheese face 25%.
That doesn’t mean every price tag will automatically inflate overnight. The surtax applies only to U.S.-origin goods, and retailers can absorb these costs, pass them on or switch suppliers entirely.
For now, overall inflation is being driven more by the gas pump than by tariffs. Statistics Canada reports that its Consumer Price Index (CPI) rose 3.0% year over year in August, matching July. Excluding gasoline, the CPI rose 2.4%, and while grocery price growth slowed to 2.8%, they are still up 29.0% since August 2021.
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Could the trade war delay lower mortgage payments?
For now, most likely. The Bank of Canada held its policy rate at 2.25% on Sept. 2, its seventh straight hold. That rate is especially important for homeowners since lenders use it as a benchmark for their prime rates.
How it impacts your mortgage depends on the type you currently have. According to TD, variable-rate mortgages and home equity lines of credit (HELOCs) generally move with the central bank’s rate. On the other hand, fixed rates are priced primarily off the bond market — the central bank affects them indirectly by influencing market expectations. If you’re mid-term on a fixed mortgage, your rate won’t change until renewal.
This trade war and the fuel inflation caused by the Iran war is casting a foreboding shadow over the BoC’s extended rate pause. Its summary of deliberations shows policymakers discussed adjusting the rate if cost pressures spread beyond the gas pumps. Market bets have since shifted toward a hike sooner rather than later.
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If a rate hike were to materialize, it would hit variable-rate borrowers first since it’s directly tied to any BoC decision. If you have a variable-rate mortgage with fixed payments, your monthly payment stays the same, however, more of it goes to interest rather than paying down your principal. If rates rise far enough, you can reach your “trigger rate,” which is the point where your payment no longer covers the interest owed.
Renewal is where both fixed and variable borrowers are in the same boat and could be subject to an increase if BoC decides to increase its rate — that’s why timing matters.
The Financial Consumer Agency of Canada says federally regulated lenders must send a renewal statement at least 21 days before your term ends. It recommends you shop around a few months prior to your term ending, since your mortgage may renew automatically if you don’t act fast enough.
If your renewal is within the next year, mark the date on your calendar, compare offers well in advance and budget around today’s rates rather than hoping for future cuts.
Is your job or income exposed?
For many households, this is the bigger risk. U.S. tariffs on Canadian autos and parts currently sit at 25%, but Trump announced they’ll eventually double on Jan. 1, 2027 — Canadian steel already faces a 50% levy. That puts workers in Ontario’s auto belt and those in the steel, aluminum and forestry sectors on alert.
In order to tackle these feelings of instability, the federal government is offering some support. A $7.5 billion federal package includes $3.5 billion in Rapid Response Supports for Workers and Employers. It will also extend temporary Employment Insurance (EI) flexibilities, fund workplace training and create a new Worker Retention and Retraining Program to help employers keep staff.
For small-business owners, the Business Development Bank of Canada has a new $500 million liquidity stream, and eligibility for its tariff programs now starts at $1 million in revenue.
What to do now
- Check where big purchases are made. Before buying appliances, furniture or outerwear, review the federal counter-tariff list and investigate how Canadian or non-American options may offer better savings.
- Get your mortgage renewal quote early. Budget for the present, rather than a more hopeful future.
- Build cash if your job is tariff-exposed. Put as much disposable cash into an emergency fund, whether in a high-interest savings account or tax-free savings account (TFSA), before the Jan. 1 auto deadline.
- Know your support options. Refer to the government’s support for workers impacted by tariffs page so you can move quickly if your hours are cut due to business slowdown.
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Writer and editor based in Toronto with experience in personal finance, insurance, arts and culture and branded content.
