Posted On Jan 21, 2026

When Canadians hear about trade tensions with the United States, most people think of auto workers.

Auto jobs matter. But focusing only on autos misses the bigger picture.

The reality is that tension with the U.S. affects jobs across the Canadian economy — including many people who don’t think of themselves as “trade exposed” at all.

This isn’t just about Americans buying fewer Canadian products. It’s about uncertainty with our largest trading partner slowly affecting hiring, wages, investment, and job security across many industries.

 

Trade Tension Reaches Far Beyond Auto Plants

Canada’s economy is deeply tied to the U.S. in ways most people never see.

Manufacturing isn’t just cars. It includes aerospace, machinery, chemicals, food processing, and advanced manufacturing. Many Canadian businesses send parts to the U.S., receive parts back, and rely on fast, predictable border crossings.

When trade becomes harder or less predictable:

  • orders get delayed

  • overtime disappears

  • expansion plans are paused

  • hiring quietly slows

There may not be mass layoffs, but families still feel the impact.

Agriculture is also highly exposed. Canadian farmers sell large amounts of meat, grains, oilseeds, and processed food to the U.S. When access becomes uncertain, farm income becomes less stable and rural jobs shrink.

Transportation and logistics feel this early too. Truck drivers, warehouse workers, rail operators, and port staff are often the first to see hours cut when trade slows.

Even white-collar jobs aren’t immune. Cross-border trade supports engineers, accountants, lawyers, consultants, and sales teams. Trade tension often shows up as hiring freezes, fewer promotions, and slower wage growth.

The biggest loss is often invisible: jobs that never get created because companies delay building, hiring, or investing in Canada.

Why the U.S. Relationship Still Matters More Than Diversification Alone

Canada has good reasons to diversify trade and reduce reliance on the United States.

But even very successful diversification can still leave Canada worse off than a scenario where we repair and stabilize the U.S. relationship — even if that relationship is smaller than it used to be.

Here’s why:

  • About 70–75% of Canadian exports still go to the U.S.

  • Supply chains are deeply integrated, especially in manufacturing and energy

  • Proximity lowers costs, increases speed, and supports higher productivity

Diversifying trade can reduce risk, but it does not replace the quality of integration Canada has with the U.S. A nearby market supports more jobs per dollar of trade than a distant one.

Antagonizing the U.S. adds real costs. If Canada’s messaging or policy choices are seen as hostile, it increases the risk of tariffs, reduced investment, and trade friction. Given how intertwined our economies are, Canada bears more downside risk than the U.S.

When jobs and growth weaken, housing markets feel it too — through slower housing starts, weaker affordability, and more financial stress for households.

Can China Replace the Jobs at Risk?

China is a large economy and can help in some areas — but there are limits.

China can support demand for Canadian agriculture, some natural resources, education, tourism, and certain inputs. That helps, especially in specific regions.

But distance matters.

Compared to the U.S., China means:

  • higher shipping costs

  • longer delivery times

  • more complex logistics

  • less flexibility for perishable goods

China is unlikely to replace jobs tied to advanced manufacturing, highly regulated services, or industries built around North American supply chains. These jobs exist because Canada and the U.S. are neighbours with shared systems and infrastructure.

Trade isn’t just about size. It’s about speed, distance, reliability, and cost.

The Bottom Line: Fix the U.S. Relationship First (or at least don’t make it worse)

There is value in improving trade with China and other markets. Diversification matters.

But we need to be honest: no country can replace the United States for Canada.

The U.S. offers scale, proximity, speed, and deeply integrated supply chains that support Canadian jobs in a way no other market can.

That leads to a clear conclusion:

Canada should continue to diversify trade — but it is more important to stabilize and repair the U.S. relationship.

If moving too quickly toward China makes that harder or less likely, then Canada should slow down and proceed carefully.

This isn’t about choosing sides.
It’s about protecting Canadian jobs, communities, and long-term stability.

Let’s Connect

If you’re concerned about how trade tensions and economic uncertainty may affect your homeownership plans, I’m happy to help.

📞 Call/Text: 416-801-6616
📧 Email: Domenic@BetterMortgagesByDom.ca

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