Mark Carney says Canadians can’t afford to wait for the U.S. to go back to ‘normal’ — why Americans can’t wait, either

Workers in the auto, steel and lumber industries are "under threat" because of tariffs, he said, while business investment is restrained under the "pall of uncertainty that's hanging over all of us."

For example, the U.S.-Mexico-Canada trade agreement (USMCA) is scheduled for review in July — but, while the stakes are high, there is uncertainty about how the negotiations will unfold (2). All parties must agree to an extension or the trade agreement will expire.

Some people believe in waiting it out, in the hope that everything will "return to normal, that the good old days will come back," Carney said in his video message. But, "hope isn't a plan, and nostalgia is not a strategy."

For those Americans also hoping everything will eventually go back to "normal," it may be worth heeding Carney's advice and shoring up your finances for uncertain times.

A changing world

Canada's Prime Minister has previously spoken about the end of the U.S.-led global trade order, thanks to structural changes such as rising tariffs and geopolitical division. And those structural changes are already impacting American consumers.

As Carney notes in his video message, the U.S. has raised tariffs "to levels last seen during the Great Depression." Tariffs are paid by importers — not foreign exporters or governments. These costs are then typically passed onto consumers and businesses through higher prices.

This, in turn, creates inflationary pressures. "The effects on core inflation are slow to burn, eventually showing up mostly through goods inflation," according to an analysis by the Federal Reserve Bank of San Francisco (3).

With a shift away from integrated global supply chains — such as the deeply integrated North American auto sector — it also signals a shift away from globalization, which provides consumers with a wider variety of cheaper goods.

A "more dangerous and divided" world also trickles down to the average consumer. In Carney's Davos speech, he stated that "great powers have begun using economic integration as weapons," which turns supply chains into "vulnerabilities" (4).

Case in point: the Iran war and the closure of the Strait of Hormuz, which has brought about a quarter of the world's seaborne oil trade (5) and 19% of the world's global liquified natural gas (LNG) exports (6) to a standstill — driving skyrocketing prices at the gas pump.

Prior to the war, the Gulf also supplied 23% of the world's ammonia, 33% of the world's helium and half of the world's seaborne sulfur (7).

While this has caused an immediate supply shock, producers are now "scrambling to find other sources for these commodities" and the "resulting competition increases the costs for producers, who in turn pass these costs on to consumers," according to a dispatch from the Atlantic Council (7).

Already, airlines are adding fuel surcharges onto ticket prices and cutting routes to manage the rising costs (and potential shortages) of jet fuel (8). Surging fuel prices and supply chain disruptions could also drive up costs for everything from groceries to housing.

Protecting your finances amid uncertainty

Instead of using hope as a strategy, American consumers can take back some control by preparing for uncertainty.