Ramifications of a trade war: an expert look at the numbers for Canada
OTTAWA — A new analysis of escalating trade disputes involving the United States warns that a deterioration into an all-out, global trade war would knock North America’s economies into recession.
The report by Scotiabank said if the U.S. breaks all trade ties with its partners — and imposes across-the-board tariffs that average 20 per cent — then Canada and Mexico would see their economies contract in 2020.
For Canada, it predicts the economy would shrink 1.8 per cent.
“A ramp-up in protectionism in the U.S. results in a negative impact on growth in each of the NAFTA partners’ economies,” said the report, co-authored by Scotiabank’s Brett House, Juan Manuel Herrera, Rene Lalonde and Nikita Perevalov.