Canadian Prime Minister Mark Carney has warned that the risk of a U.S. recession has “significantly increased” due to new tariffs imposed by the Trump administration. Speaking during a campaign stop in British Columbia, Carney emphasized that a slowdown in the U.S. would directly affect Canada’s economy, given the close trade ties between the two countries.
Carney cited recent global market sell-offs as a reaction to the growing uncertainty caused by protectionist policies, particularly tariffs. He argued that such measures hurt not just the U.S. but the global economy as a whole. In response, Carney has been in active discussions with Bank of Canada Governor Tiff Macklem and Finance Minister François-Philippe Champagne to monitor and manage the situation.
Canada is already feeling the pressure. In March, the country recorded a loss of 33,000 jobs—the worst monthly decline in over three years. Key manufacturing sectors, especially auto production, have been disrupted by the new trade barriers. Business sentiment is also weakening, with one-third of firms expecting a recession in the next year and many putting investment and hiring plans on hold.
According to the Bank of Canada, recession fears among Canadian consumers and businesses have spiked sharply. A recent survey revealed that 32% of businesses now anticipate a recession within the next 12 months, double the figure from previous quarters, while consumer concern has surged to 66.5%.
Carney’s remarks underline how closely tied Canada’s economic fortunes are to U.S. policy decisions—and how vulnerable the country is to fallout from growing trade tensions.
