TD: US 50% Tariffs Cover Just 0.6% of Imports; Q4 Risk Rises

For markets and investors, the latest trade escalation is less a tariff shock than a policy uncertainty signal. TD Economics calculates the new 50% duties cover 0.6% of U.S. imports from Canada, while removal on another 0.5% keeps the aggregate tariffed dollar amount roughly unchanged. The real forward-looking risk is that prolonged trade conflict drags Canadian business confidence and pushes fourth-quarter GDP toward stall or contraction.

On September 9, 2026, economists at TD Economics published a client note arguing that the latest U.S. tariffs and import restrictions on Canadian goods are unlikely to significantly dent Canadian economic growth in the near term. The assessment, authored by senior economist Andrew Hencic, responds to Washington's threefold reaction to Ottawa's counter-tariffs: stop imports of some products, remove tariffs on a handful of others, and introduce new tariffs on a third set. The key insight is that the U.S. has shifted what is covered by the tariff umbrella rather than expanded its overall footprint, landing on what TD calculates to be a similar dollar amount of tariffed goods.

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TD Economics calculates the new 50% duties cover 0.6% of U.S.

The concrete details bear this out. Beginning September 15, the U.S. will impose 50 percent tariffs on Canadian goods representing roughly 0.6 percent of U.S. imports from Canada, while simultaneously removing 50 percent tariffs on other goods representing about 0.5 percent. The newly targeted products include outboard motorboats and certain metal and paper goods. Because the newly tariffed slice is very small relative to total trade and is partly offset by the removal of tariffs elsewhere, the direct effect on Canadian GDP in the next quarter is expected to be modest.

Yet the report also warns that the escalation raises the probability of a more prolonged trade conflict, adding uncertainty for Canadian businesses and increasing the odds that the economy could stall or shrink in the fourth quarter. Hencic described the shift as 'another manifestation of policy uncertainty,' reinforcing concerns about U.S. market access and weighing on Canadian firms. That distinction between near-term resilience and medium-term downside is central to the analysis: the current tariff realignment may not compress growth today, but it erodes business confidence and makes planning harder for exporters, importers, and logistics operators.

From a market perspective, the reclassification of tariff lines is not neutral operationally. Even when aggregate tariff dollars are unchanged, moving which products face a 50 percent duty forces affected industries to re-evaluate landed costs, renegotiate contracts, and possibly redirect supply chains. For the marine manufacturing, metals, and paper sectors named in the new measures, the impact can be acute even if national GDP effects are muted. Conversely, sectors whose products were removed from the duty list gain relative price relief, creating a redistribution of cost pressures rather than a uniform shock.