- Eurasia Group report warns Canada.
- US political turmoil hits Canada hardest.
- No other nation as profoundly affected.
The long-standing relationship between the two nations "is history," according to the risk management business, and continued trade uncertainty will have an effect on the Canadian economy.
It claims that this year would present "powerful headwinds" to Canada's efforts to diversify trade and connections, and that the nation will have to manage its ties with the United States while establishing new ones with other nations.
Following President Donald Trump's victory and his promises to turn Canada into a U.S. state, ties between the two countries deteriorated in 2024.
Since then, Trump has placed several tariffs on Canada, including crippling levies on the automobile, steel, aluminum, and timber industries.
According to the Eurasia Group research, Canada was "comfortable" with its close links to the United States for many years, but the relationship has evolved, and Washington's actions could cause Canadian investors and businesses to "become collateral damage."
How will US political turmoil specifically impact Canadian trade in 2026?
US political fermentation under President Trump's alternate term will hammer Canadian trade in 2026 through escalated tariffs, a argumentative USMCA review, and habitual query dragging investment.
35 mask tariffs onnon-CUSMA biddable goods plus targeted 50 sword/ aluminum, 25 motors/ timber duties persist from 2025, exempting only pact- qualifying exports but forcing force chain rewiring. Ontario automakers, Quebec smelters, and BC forestry face$ 15- 20B periodic successes as Trump leverages" divide and conquer" against Canada Mexico, rejecting Carney's pacific preludes.
The obligatory 2026 review six timespost-ratification threatens dairy concessions, energy sculpt- outs, and defence procurement authorizations amid Trump's" transitional deal" rhetoric. Dragged dealingpost-midterms detainment resolution, constricting exports untilmid-2026 while Bank of Canada models 0.5- 1.2 GDP drag from stalled North American integration.