Signs of economic resilience amid trade war strengthens Canada in negotiations, says researcher [video]

The Canadian economy has shown signs that it’s capable of withstanding the latest escalation in President Donald Trump’s trade war, according to a progressive Canadian economist who says negotiators were right to walk away from a bad deal with the United States.

“I’ve argued for years that the importance of exports in general in our economy is vastly overstated,” said Jim Stanford, an economist and director of the Centre for Future Work, a labour economics think tank based in Vancouver. 

“Eighty per cent of our GDP is produced in Canada by Canadians and used by Canadians and never crosses a national border,” he said.

“This is why we haven’t had a recession despite the chaos that Trump’s been putting on us for a year and a half,” he added. “We’ve had a serious meltdown, but we haven’t had the meltdown that Trump predicted and that many economists have predicted.”

The latest economic figures released on Friday appear to bear that out, as the economy grew at an annualized rate of 3.3 per cent in the second quarter, reportedly the fastest rate since 2023. An upward revision in first-quarter growth also means Canada wasn’t in a “technical recession,” as previously reported.

Stanford made the comments earlier this week during a webinar hosted by the Canadian Centre for Policy Alternatives (CCPA). The panel-style discussion focussed on what the latest chapter in Trump’s trade war means for Canada and what comes next.

Stanford described the new 50 per cent tariffs imposed by the Americans as political theatre, and said that although he believes Canada can arrive at an agreement with Trump, the notoriously volatile president is liable to change it at any time.

“He’s not out to get a mutually beneficial trade agreement,” Stanford said. “He’s out to score points and try and reaffirm his internal political situation, which is weakening by the day.”

In the meantime, the Canadian economy has shown signs of resilience, he said, although he acknowledged that certain businesses and workers will feel the pain.

“There are certain businesses for sure that are going to suffer and certain workers are going to lose their jobs, no doubt about it,” he said.

“But it will be hard to even see it in the macroeconomic data, so this again is where I think the experience of the last year-and-a-half in a way strengthens Canadians’ hands, because the world has not fallen apart.”

The webinar, recorded on Wednesday, was hosted by Stuart Trew, director of the CCPA’s Trade and Investment Research Project.

Other panelists included Laura Macdonald, a professor in the Department of Political Science and the Institute of Political Economy at Carleton University; Angelo DiCaro, director of research at Unifor, who leads the union’s policy work on the automotive and automotive parts industry as well as international trade policy; and Marc Lee, a senior economist with the CCPA.

The Canadian Centre for Policy Alternatives is an independent, non-partisan research institute with a national office in Ottawa, along with offices in B.C., Saskatchewan, Manitoba, Ontario, and Nova Scotia.