Tariffs Are Hurting Us More Than We Admit, but Growth May Keep Limping Along

The latest OECD economic outlook leaves me with mixed feelings. On the one hand, global growth has been surprisingly resilient despite the wave of tariffs unleashed earlier this year. On the other, the cracks are already showing, and pretending otherwise could be dangerous.

When President Donald Trump slapped tariffs on almost every major trading partner, including Canada, many feared the worst. To some extent, those fears are coming true. Businesses are caught in a bind: raise prices and lose customers, or absorb the costs and lose profits. Neither is sustainable. For small businesses, the pressure is existential some will simply not survive.

Canada, unfortunately, is living this reality. Our unemployment rate climbed above seven percent in August. People are cutting back on spending. The national GDP shrank for three straight months this summer. Yes, the Bank of Canada cut rates this month to soften the blow, but lower borrowing costs can’t fully patch up a trade war.

And yet the OECD still expects growth. A modest 1% for Canada this year, and 1.1% in 2026. Globally, growth is forecast at 3.2% in 2025. That sounds decent on paper, but let’s be honest: it’s sluggish growth, not healthy momentum. It’s like walking with a limp you’re moving forward, but every step hurts.

The reality is that tariffs are already reshaping the way businesses think about investment, supply chains, and workers. What we’re experiencing now may only be the opening chapter. If tariffs escalate further, growth projections will quickly turn into revisions downward.

The OECD is right to call for cooperation. But given the current climate of political brinkmanship, that feels like wishful thinking. Until cooler heads prevail, Canadians and many others worldwide should brace themselves for an economy that grows, yes, but only in the most fragile sense of the word.