 Welcome to Mind Your Business ! Consider this your weekly guide to understanding what’s happening in the worlds of economics, business and finance. By Peter Armstrong
|  | Canada-U.S. relations are set to take another blow on Wednesday, with a new round of tariffs. (rawf8/Shutterstock) | | | It feels like we've been building to this week.
Ever since U.S. President Donald Trump was elected, we've been waiting for a moment when his broad plan about tariffs is put forward.
He initially said it would happen on inauguration day, then the first day of February. That was delayed to the 4th of February.
On and on, the threat loomed large, but the big plan was always pushed back, delayed or diminished.
Steel and aluminum tariffs are in place, and China has been hit by the full force of tariffs.
But so far, the worst of the threats for Canada has yet to emerge.
That doesn't mean it won't. Wednesday is Trump's "Liberation Day," and we will have to watch closely to see what is actually done — the president has a tendency to announce measures, then slow-roll the actual implementation.
It also doesn't mean the on-again, off-again nature of the threat hasn't already had an impact.
One clear sign of the tariffs showed up in U.S. goods and services trade data released last week. | | |  | | | | | The trade deficit widened as American businesses imported a ton of stuff in an effort to get ahead of tariffs.
That will distort economic data for a few months.
If you're a Canadian exporter who just had a surge in orders, it's a safe bet that surge will be used to pad out inventories and make it so your customer doesn't have to order as much stuff next month (or two or three months).
The mere threat of tariffs has already driven down investment in Canada.
All the chaos and uncertainty isn't just bad for our collective blood pressure. It makes it hard for a company (foreign or domestic) to seriously consider a major investment in Canada right now.
They simply don't know how much access they would have to either the market or the supply chain they rely on.
In a recent speech, Tiff Macklem, governor of the Bank of Canada, said that uncertainty is already being felt in the Canadian economy.
"As a result of all these trade-related factors, many businesses have scaled back their hiring and investment plans," said Macklem. (You can watch his speech here.)
He also showed the audience this chart highlighting an unprecedented spike in uncertainty. |  | | | You don't need to be an economist to know these are tough times. And you probably didn't need that chart to tell you people are worried.
At the very least, we will get some more clarity this week as Trump's biggest push yet for broad tariffs is expected.
But he's been swayed before. Sometimes it's by markets (which are down more than five per cent so far this year). Sometimes it's CEOs, like the auto executives that met with Trump last week.
But sometimes he just pushes ahead (like he has with steel and aluminum in this country).
So, Wednesday's outcome won't be sure until it actually happens.
Follow our coverage at cbc.ca/news.
As ever, I'm trying to grow the newsletter, so share this email with friends or click on the share button below.
Someone wrote to say it wasn't working for them. So if you want to send someone a link to sign up, click here or copy/paste this:
https://subscriptions.cbc.ca/listmanagement/forms/mindyourbusiness | | | Share this newsletter | | or subscribe if this was
forwarded to you. | | |  | | April 2 is being heralded by U.S. President Donald Trump as "Liberation Day." He intends to impose sweeping new tariffs on Wednesday. | | | | | | The Canadian job market has slowed in recent months. We will get the latest numbers from Statistics Canada on Friday. Economists expect the unemployment rate ticked up to 6.7 per cent. | | | | | | We will get Canada's merchandise trade balance numbers on Thursday. The U.S. has seen a sharp widening of its trade deficit as American businesses tried to get ahead of tariffs. | | | | | Three things to read, watch and listen to this week | | |  | Across Canada, shoppers are reconsidering how and where they spend their money. (Ethan Cairns/Canadian Press) | | | 1. Canadian consumers are making choices | | | I was at the grocery store last week. It was late in the day, so the shelves had been picked over pretty well.
But I was struck by something in the fresh fruit section.
Most of the aisle was empty or nearly so. But one red section stood largely unmolested. Piled high were small containers of strawberries. A quick look at the label confirmed what you probably already know: they were American strawberries.
Canadians have been voting with their dollars and choosing non-American alternatives.
Much of this has been anecdotal. But the Canadian payments company Lightspeed issued some fascinating data last week.
Ninety-one per cent of Canadian respondents "are actively choosing or planning to prioritize Canadian-made products — and most are willing to pay more to do it," wrote the company in a release.
In fact, 76 per cent of respondents said they would be willing to pay five to 10 per cent more to purchase Canadian products.
The study found 65 per cent of Canadians are reading labels and tags to ensure they’re buying Canadian, while 73 per cent are either currently avoiding or planning to avoid major U.S. retailers such as Walmart, Amazon and McDonald’s.
Another key industry is seeing a downturn.
Data from the U.S. aviation firm OAG shows airline bookings from Canada to the U.S. have collapsed in recent months.
OAG compared total bookings at this point last year to those booked so far in 2025 (as travellers traditionally start making summer plans around now).
"The decline is striking — bookings are down by over 70 per cent in every month through to the end of September. This sharp drop suggests that travellers are holding off on making reservations, likely due to ongoing uncertainty surrounding the broader trade dispute," said the company in a release.
Canadian airlines have reportedly pushed back on the numbers in the OAG report. The publication Open Jaw spoke to one airline executive who said the figures "simply aren't true."
“The OAG data are dead wrong, and we have told them so,” the executive said. “Those numbers are not approaching reality.”
In a lot of ways, the consumer is the greatest strength in any economy. Consumers have bailed the economy out at every crisis.
It will be interesting to see how resolute Canadians remain in terms of buying Canadian as the trade war drags on.
Read about the Lightspeed survey here.
Read the Open Jaw piece to hear airline perspectives. | | | 2. Victory bonds | | | If there's one piece you click on in this newsletter, make it this article by economist Armine Yalnizyan.
Yalnizyan, the Atkinson fellow on the Future of Workers, wrote a couple of opinion pieces in the Toronto Star outlining how the federal government can issue war bonds like they did during the First and Second World Wars.
The idea is pretty simple: give Canadians an investment they can make in small or large increments that give Ottawa the cash to fight the trade war.
After all, she says, the idea worked then. Why not now?
"More money was raised from the voluntary purchase of victory bonds than from obligatory taxes during the First World War and bond sales almost doubled tax revenues during the Second World War," wrote Yalnizyan.
During WWII, she says, bonds were sold for as low as $50 and as high as $100,000.
She says the 2025 version of victory bonds should be tax-free and returns should be guaranteed at five per cent for the first year (which is roughly the prime rate right now).
Yalnizyan says the program could raise some much-needed cash to help Canada through the tumultuous months and years ahead.
"Over the course of nine fundraising campaigns during the Second World War, almost $12 billion was raised ($248 billion in today’s terms, or 54 per cent of current federal revenues). Half were purchased by corporations, half by individual citizens," she wrote.
Read Yalnizyan's piece in the Toronto Star here. | | | 3. Is there even such a thing as a Made in America car anymore? | | | Shameless plug alert: I am highlighting a piece I wrote last week.
Every time I hear Donald Trump say he wants to see more cars that are "Made in America," I wonder what he's talking about.
The fact is, there isn't such a thing. And there hasn't been for a while.
For decades, automakers have spread their production out across the North American continent.
This intricate and complex supply chain reflects an entire industry trying to find the most efficient, most cost-effective way to build cars and keep costs down for consumers.
The piece maps how raw materials are shipped to one country and shaped into a component, that's then built into a part, which is assembled into a vehicle that moves freely in and out of three countries.
Rubber is processed in Monterrey, Mexico. It's shaped into a connector in Iowa. That piece fits into the control arm assembly made in Brampton, Ont. The control arm is put together as part of the rear suspension assembly in Detroit. The rear assembly is shipped to Windsor, Ont., for final assembly and eventually sold in California.
"No car is truly made in just North America," said Patrice Maltais from the industry association Global Automakers Canada.
He says the continent-wide nature of the supply chain cost billions of dollars and decades to build.
"You have to basically untangle a lot of those supply chains and put new ones down, and that takes a lot of time and it takes a lot of money," he said.
He says a new manufacturing plant could cost anywhere from $2 billion to $10 billion.
So, you can undo those decades of investment and development. But it will cost you.
After the piece published, I heard from a trade lawyer I like and admire who was skeptical of the idea that the status quo is that hard to change.
His main point was that if push really comes to shove, automakers will quickly go to where they can do the most business. And that's in the U.S.
But for now, automakers have spent years and billions of dollars building up a North American industry that works best for them.
On Wednesday, we will get the latest tariff news, specifically what's coming for the auto industry. So I wanted to put this here to highlight how the industry is currently built.
Read my article on the state of the auto industry here. | | | How the economy looks beyond Bay Street | | | GDP update | | | Last week, we were looking ahead to the GDP numbers and what they may tell us about the amount of cushion the economy had heading into a trade war.
The data released on Friday showed January came in strong. The economy expanded by a healthy 0.4 per cent in January.
"The largest gain in nearly a year, and this was on top of an upwardly revised 0.3 per cent advance the prior month (initially +0.2 per cent)," wrote BMO's chief economist Douglas Porter.
"The big gains left output 2.2 per cent above year-ago levels, the fastest pace in nearly two years, and drumming home the point that the Canadian economy had been turning the corner thanks to the dramatic drop in interest rates since last June," he wrote. | | |  | But January stands now as a sort of statistical artifact.
That was before the trade wars and the tariffs and the threats.
Statistics Canada's preliminary estimate for February showed economic growth all but ground to a halt.
Citi economist Veronica Clark said January was likely "the last of strong data" before tariffs started to become a serious fixture on the economic landscape.
"As those tariffs start to come into effect in March and especially into the spring and summer, we expect to see softer trade activity and production," she wrote in a note to clients.
What do you think?
I always appreciate your feedback. | | | Share this newsletter | | or subscribe if this was
forwarded to you. | | | That's it for this week | | | Drop me a line anytime.
Send ideas, comments, feedback and notes to peterarmstrong@cbc.ca.
I'm still lingering over at X, but migrating to Bluesky. Come join the conversation there.
Problems with the newsletter? Please let me know about any typos, errors or glitches.
And if you like this newsletter, share it with your friends by clicking on the link below.
Check cbc.ca/news/business throughout the day for the most recent business headlines. | | | | |  | | | On the lookout for more consumer news? The Marketplace Watchdog newsletter is your weekly look at exclusive investigations and consumer tips and tricks to help you and your wallet. Subscribe now. | | | | | |
