Canada recorded the largest decline in GDP since the pandemic due to US duties

Canada's economy shrank by 0.4% in quarterly terms in the second quarter of 2025, the highest level since the coronavirus epidemic collapsed, due to a sharp decline in investment due to the introduction of US import duties. This was confirmed on August 29 by data from the Canadian statistical Service.

"Real gross domestic product (GDP) decreased by 0.4% in the second quarter of 2025 after rising by 0.5% in the first quarter," the agency said.

This reduction is the first since the third quarter of 2023 (-0.1%) and the largest since the second quarter of 2020 (-11%), the Newspaper added.Ru». After a significant decrease in exports of goods and import duties of the United States, Canadian exports sank by 7.5% in the second quarter of this year, while in the first quarter they showed an increase of 1.4%. Shipments of passenger cars and trucks abroad immediately dropped by 24.7% in the second quarter, industrial machinery, spare parts and equipment — by 18.5%, and tourism services — by 11.1%.

In a negative tone: Canada is moving closer to the EU amid conflicts with the United States

Trump's tariff policy is turning allies against him

On June 27, US President Donald Trump announced the termination of trade negotiations with Canada due to the introduction of a tax on digital services of American technology companies. Later, on July 11, Trump ordered the imposition of trade duties of 35% on goods imported from Canada. The tariffs came into force on August 1.

Bloomberg reported on August 22 that Canada intends to cancel retaliatory duties on most goods from the United States in order to reduce tensions with the White House. It was clarified that the Canadian government would change its tariff policy to be more in line with US measures, but the authorities would maintain import duties of 25% on American steel and aluminum, as well as on cars.

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