The latest Canadian GDP figures are removing any doubt about the impact of U.S. tariffs, with the economy contracting 1.6% in the second quarter as weakness in exports took the spotlight. So, with no U.S. trade deal in sight, what happens next? James Marple, Associate Vice President and Senior Economist with TD, tells MoneyTalk the economy is facing challenges, but there are some bright spots.
Transcript
Greg Bonnell: The latest Canadian GDP numbers helped remove any doubt about the impact that tariffs from the Americans are having on this economy. Of course, we saw GDP shrink 1.6% in the second quarter, exports taking the brunt of that. So, with no trade deal in sight with the Americans, what happens next? Joining us now for a closer look at the economy is James Marple, Associate Vice President and Senior Economist with TD.
Great to have you back on the program.
James Marple: It’s great to be here.
Greg Bonnell: Interesting times, indeed. I know you’re busy in times like this. Let’s start with an overview of Canada’s economy. What stands out for you?
James Marple: Well, obviously, as mentioned, we’ve been hit by this major tariff shock. And we have to sometimes remind ourselves that we’re a small, open economy, with a large share of our production going to the United States. So a quarter of everything we produce is exported, and a quarter of that– sorry, 3/4th of that– go to the United States. So a whole fifth of our economy goes to the US.
So I think what’s not surprising is that, when we’ve had this tariff uncertainty, we had a major hit to our export sector. I think what’s good to see is that, outside of that, we have seen spending hold up. But really, the decline has been focused on places you’d expect
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