A new Scotiabank report looks at the economic consequences of U.S. tariffs on our economy.
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.
This worst-case scenario is one of several potential outcomes examined by Scotiabank.