Canada Trade Outlook

Canada’s growth prospects improve as trade tensions ease. After a tumultuous sequence of events, the rollback of U.S. “reciprocal” tariffs marks a significant de-escalation in trade tensions. Emerging largely unscathed, Canada now enjoys a competitive advantage with tariff rates lower than those faced by most other countries. While heightened uncertainty likely dampened economic growth in at least the first quarter of 2025, lower interest rates could still provide the backbone for Canada’s recovery through the rest of the year – provided trade tensions do not re-escalate following upcoming negotiations with the U.S. Developments in global trade policy will remain a key determinant of Canada’s economic outlook, which will be closely watched by both policymakers and the commercial real estate sector.