**BREAKING: TD Securities projects Canada GDP hit from US tariff escalation**
TD Securities has quantified the economic damage from the ongoing US-Canada trade dispute, with analyst Robert Both warning that new Section 338 tariffs and Canadian retaliatory measures will shave approximately 0.3 percentage points off GDP through 2027. The growth impact is expected to concentrate in late 2026, creating a delayed economic drag as trade restrictions filter through supply chains and business investment decisions.
The analysis comes as bilateral trade tensions between Washington and Ottawa intensify, threatening one of North America’s most integrated economic relationships. Canadian exporters across manufacturing, energy, and agriculture sectors face immediate headwinds, while the retaliatory measures will likely increase input costs for domestic industries reliant on US components.
Market participants should anticipate heightened volatility in CAD crosses and Canadian equity sectors with heavy US export exposure, particularly energy and materials.
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FXnCO Insight
** Position defensively in CAD-linked assets through Q4 2026 as the GDP drag materializes, with particular attention to manufacturing and export-heavy equities vulnerable to sustained cross-border friction.
Source: FXStreet