Canada’s Ambassador Warns Trump’s Tariffs Are Driving Up Investment Costs as Bilateral Trade Reaches US$570 Billion

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A trade relationship worth hundreds of billions of dollars is confronting a problem that cannot be measured at the border alone: uncertainty over what the rules will look like next year. On November 11, Canada’s ambassador to the United States, Mark Wiseman, warned business leaders in Washington that President Donald Trump’s tariffs are making companies more hesitant to invest.

His remarks came as U.S. figures showed approximately US$570 billion in goods moving between the neighbours during the first nine months of 2026. The volume remains enormous, but the dispute is reaching beyond import bills into decisions about factories, research, jobs and where businesses choose to expand.

An Ambassador Makes the Case for Predictable Trade

At the November 11 B20 summit, hosted by the U.S. Chamber of Commerce, Wiseman focused on the decisions businesses make long before a shipment crosses the border. “Uncertainty increases your cost of capital,” he said. His examples included building a factory, adding shipping capacity and funding research and development. Each requires spending today in the hope of earning returns years into the future. When tariff rules can change during that period, financing and approval become harder to justify.

Wiseman arrived in Washington as ambassador in February 2026 with an investment background. He previously led the Canada Pension Plan Investment Board and held senior roles at BlackRock. That experience gives his warning financial significance: tariffs are not simply a charge on imports, but a factor in deciding whether a project makes economic sense. His remarks were an appeal for stability, not an announcement that Washington had agreed to remove its duties.

What the US$570 Billion Trade Figure Really Measures

According to the U.S. Census Bureau, American exports of goods to Canada totalled approximately US$265.9 billion from January through September 2026. U.S. imports of Canadian goods reached about US$304.6 billion. Together, those flows amounted to roughly US$570.4 billion. The figure covers nine months, not the full calendar year, and excludes services such as tourism, consulting and financial activities. Treating it as an annual total would understate the relationship’s actual scale.

The two-way goods total exceeded the comparable period of 2025, although particularly strong trade does not mean tariffs are harmless. Canadian oil, automotive components, machinery and other products continue to supply American customers, while Canadian manufacturers and households buy substantial amounts from U.S. businesses. The Census figures also show an American goods deficit with Canada of about US$38.7 billion over those nine months. Trade balances measure flows, however, not the value of jobs, investment or reliable access to neighbouring suppliers.

Tariffs Have Made a Mostly Free-Trading Border More Expensive

The tariff dispute changes the framework built under successive North American trade agreements. A Congressional Research Service report found that calculated U.S. duties on Canadian imports jumped from approximately US$400 million in 2024 to US$10 billion in 2025. The charges applied to about 15% of imports from Canada by value. Most qualifying goods still entered duty-free, but industries facing restrictions experienced a harsher environment.

The Bank of Canada estimated in October 2026 that the average U.S. tariff rate on Canadian goods had increased to 7.5%, compared with 5.0% in July. It also estimated that approximately 80% of Canadian goods exports to the United States remained tariff-free. That distinction matters: this is not a universal 50% tax on everything crossing the border. Some products face severe sectoral or additional duties, while others retain preferential access. Canada has answered Washington’s measures with its own counter-tariffs, adding another layer of costs and uncertainty.

Why Uncertainty Can Freeze a Factory Expansion

Trade policy can affect investment decisions before a company pays a tariff. Consider a manufacturer deciding whether to install a new production line. The machinery may last twenty years, but its financial projections depend on market access, material costs and the prices customers will accept. If duties or exemptions could change unexpectedly, managers may require a higher return before approving the project, postpone borrowing or choose a different location. That is the investment dilemma Wiseman described.

Bank of Canada surveys offer evidence that the concern is more than theoretical. Its third-quarter 2026 Business Outlook Survey found investment intentions generally remained resilient, particularly where demand was strong. Yet responses gathered after Canada-U.S. trade talks broke down on August 21 pointed to weaker sentiment and more pressure on investment plans. Firms described changing suppliers, improving efficiency, exploring other markets and sometimes waiting before committing capital. The response varied, but uncertainty was measurable.

Auto Manufacturing Shows How Quickly Investment Decisions Become Personal

Vehicle production depends on parts and vehicles moving across borders. Government figures indicate that more than 90% of Canadian-made vehicles and 60% of Canadian-made auto parts are exported to the United States. In Ontario, automotive manufacturing supports more than 95,000 workers, and the province shipped approximately C$60 billion in vehicles and parts to the American market in 2025. That integration makes tariffs consequential for plants and suppliers.

Brampton offers a concrete reminder of what is at stake. Stellantis halted work on its idled Ontario assembly plant and moved planned Jeep Compass production to Illinois amid the trade conflict. In November 2026, it agreed to sell the Brampton site to Canadian defence manufacturer Roshel, prompting concern over workers’ futures. Corporate decisions have multiple causes; tariffs cannot explain every change. Still, a plant that once represented years of expected automotive employment illustrates why governments and unions watch cross-border investment decisions so closely.

The Pressure Extends Beyond Automakers

Steel, aluminum, wood products and other manufacturers are also exposed to shifting U.S. trade restrictions. Their predicament often begins with an urgent, costly commercial choice: absorb a tariff and accept thinner margins, raise American prices and risk losing customers, or restructure production to serve the market from inside the United States. Each option carries a cost. Smaller suppliers cannot easily spread costs across factories or markets, making changes particularly difficult.

Canadian cabinet makers provide a stark example. Reuters reported in November that the industry employed nearly 25,000 people and had already lost more than a tenth of its workforce. Quebec manufacturer Cabico, once heavily dependent on U.S. buyers, reported a 25% decline in shipments and significant layoffs. A U.S. tariff on certain cabinet products was scheduled to rise from 25% to 50% on January 1, 2027. The prospect gives businesses reason to reconsider hiring and expansion before it takes effect.

American Businesses and Shoppers Also Face the Bill

Tariffs collected at American ports are paid by importers, not foreign governments. A February 2026 analysis by Federal Reserve Bank of New York researchers estimated that nearly 90% of the economic burden of U.S. tariffs imposed in 2025 fell on American firms and consumers. Foreign suppliers sometimes lower their prices, but the research found they absorbed relatively little of the increase. This explains Canada’s argument that damage crosses the border.

Separate New York Fed research estimated that about 26% of a tariff increase ultimately passes through to consumer-goods prices. Much of that effect comes from more expensive imported products, but domestic goods become costlier too when factories use tariffed materials or face less price competition. Indirect increases can take nine to twelve months to spread. A manufacturer may first see higher input bills; households experience the impact later at a store or dealership, even if the product is made domestically.

The Cost to Canada’s Economy Could Last for Years

In October 2026, the Parliamentary Budget Officer estimated that trade measures introduced since early 2025 could leave Canada’s real gross domestic product 1.4% lower after five years than it would have been under a pre-tariff trade baseline. If tariffs remain permanent, the PBO also estimated employment could fall by as many as 185,000 jobs at the peak effect. These are modelled differences from a hypothetical no-tariff path, not jobs already counted as lost.

The warning matters because investment affects more than sales. A deferred factory upgrade can mean fewer construction contracts now, less advanced equipment later and slower productivity growth over time. The PBO expects trade barriers to weigh on exports, investment and employment while adding to consumer costs. At the same time, actual economic results depend on commodity prices, global demand and how quickly companies adapt. An export month can coexist with weakening incentives to build for the future.

Negotiations Have Restarted, but Businesses Still Lack Certainty

Ottawa and Washington resumed discussions after negotiations broke down in August, with steel and automobile tariffs among the central issues. Wiseman urged the removal of duties imposed under Sections 232 and 338 of U.S. trade law. Those measures target particular industries and products, even while much of the broader Canada-U.S. trade relationship remains tariff-free. A partial agreement could provide relief without restoring the predictability businesses enjoyed under earlier trading arrangements. The negotiations still have not produced a comprehensive tariff settlement.

Politics shifted after November’s U.S. midterm elections. Democrats have signalled plans to challenge Trump’s tariffs in Congress, but Prime Minister Mark Carney has emphasized that the Trump administration remains Canada’s principal negotiating counterpart. The Canada-United States-Mexico Agreement review adds uncertainty about future market access. For companies considering investments lasting decades, the real test is not a favourable headline from one round of talks, but whether any deal produces durable rules.

Canada Is Trying to Compete for Investment While Diversifying Trade

Ottawa is making domestic investment more attractive as the American market becomes less predictable. Canada’s 2026 budget highlights a Productivity Mega Deduction that allows immediate tax deductions for a broader range of qualifying capital investments. Ottawa estimates the measure will reduce Canada’s marginal effective tax rate on new investment to 6.4%, versus 16.9% in the U.S. Those figures describe a modelled tax burden on an additional investment, not the headline corporate income-tax rate.

Carney’s government says it wants to double Canadian exports to markets beyond the United States over the next decade. Europe and Asia offer growth opportunities, but building customer relationships and supply chains takes time. For companies already connected to American suppliers and buyers, diversification is an addition to the strategy, not an overnight replacement. Wiseman’s central message is therefore straightforward: dependable trade rules could unlock investment on both sides of the border more effectively than repeated uncertainty.

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