Canada implements mass job cuts following Trump's implementation of tariffs, marking a significant economic change
Canada is experiencing a surge in job losses and rising unemployment rates, according to economist Tony Davenport of Oxford Economics. Davenport predicts about 140,000 more job losses and unemployment climbing into the mid-7% range later this year, primarily due to the increased tariffs imposed by President Donald Trump.
The tariffs, which have escalated to 35% for Canada, have particularly affected the manufacturing sector, reducing hiring intentions of companies. As a result, the employment rate in Canada is at its lowest point in eight months, standing at 60.7%, and the labor market saw a reversal in July, with a loss of 40,800 jobs after a surge in hiring in June.
The Bank of Canada has stated that Trump's sectoral tariffs on steel, aluminum, and autos have hit the manufacturing sector hard. This is evident in the decrease in manufacturing employment in Canada, with a loss of nearly 10,000 jobs from the previous year.
The tariffs have also caused job losses for about 1,000 members of the United Steelworkers union, as confirmed by Marty Warren, the union's national director.
President Trump, as part of his "America First" trade policy, has introduced sector-specific tariffs to protect U.S. manufacturing and reduce trade deficits with key partners, including Canada.
The unemployment rate in Canada remains at a near-multi-year high of 6.9%, and unemployment among 15- to 24-year-olds has jumped to 14.6%, with their employment rate falling to 53.6%. These levels are unseen since the late 1990s, excluding pandemic years.
The Bank of Canada left its benchmark interest rate unchanged this week but hinted it could move to cut rates if growth continues to falter and inflation remains under control.
The White House did not immediately respond to FOX Business's request for comment.
Reuters contributed to this report.
