Trump tariffs could crush Canada’s economy, warns former Trudeau advisor — says the country fought 2 world wars with America, helped in Afghanistan. Now Canadians are ‘hurt’ and ‘angry’

“I think it's a combination of we're hurt and angry,” said former advisor to ex-Prime Minister Justin Trudeau on a recent episode of The Prof G podcast.

He warned that the trade war could cripple the Canadian economy while also imposing hard costs on ordinary Americans by diminishing U.S. soft power.

Economic costs on both sides

Like any failing relationship, a trade war inflicts damage on both sides, leaving neither unscathed.

On the Canadian side, the Bank of Canada estimates that the trade war could lower GDP growth by as much as 3% in the first year.

“It would basically look like the 2008-09 financial crisis up here,” said Moffatt. “But unlike ‘08-’09, it would actually be inflationary in nature. It's actually a little bit more like the pandemic where we get the GDP drop of the financial crisis without the deflation of the financial crisis.”

The chaos has also shifted the way Canadians see their southern neighbors. According to a recent Leger poll, 27% of Canadians said they consider the U.S. an “enemy”, a stark rise from just 4% in 2020, according to YouGov.

Americans, too, are bracing for economic fallout. The Federal Reserve Bank of Atlanta recently lowered its first-quarter 2025 GDP growth estimate from approximately 3% to -2.4%. Meanwhile, a study by the Peterson Institute for International Economics estimates that the average U.S. household could face an additional $1,200 in costs due to the trade war. Notably, this estimate accounts for the offsetting impact of Trump’s anticipated tax cuts but doesn’t factor in the effects of reciprocal tariffs from other nations.

One example of these retaliatory measures is a proposed 25% surcharge on electricity exports to New York, Michigan and Minnesota by the Canadian province of Ontario — potentially leading to higher energy bills for American families.