Podcast
Economic Nationalism
Will Simpson and Greg Wise
August 29, 2026
Why Canada’s strategic resources are more important than ever.
Despite renewed uncertainty on the Canada-U.S. trade front, most major markets managed to finish higher this week. In Canadian-dollar terms, the S&P 500 gained 1.5%, while the Nasdaq rose 1.9%. Technology and semiconductor stocks were among the better-performing areas, supported by solid earnings and continued optimism around AI-related investment. Some of those gains faded on Friday, but tech still finished the week on a positive note. Japan also had a good week, gaining 1.6%, while Canada was a little softer, with the TSX down 0.4%. Canadian consumer discretionary stocks had a particularly difficult week, falling more than 5%.
The biggest story of the week was the renewed Canada-U.S. trade dispute. Following the breakdown in negotiations last week, 50% U.S. tariffs are now in effect on roughly US$20 billion of Canadian goods, with Canada responding with another round of counter-tariffs set to take effect in September.
So far, markets have taken the escalation in stride. The bigger concern is what it could mean for the Canadian economy, given how important trade with the U.S. remains. The key question is still how long these tariffs actually stay in place. Current estimates suggest they could slow Canadian growth by roughly half a percentage point, while Canada’s counter-tariffs could also add some inflation pressure. There is still a chance cooler heads prevail, but for now the trade environment has clearly become more complicated.
On the positive side, Canada’s economy grew at a 3.3% annualized pace in the second quarter, the fastest quarterly growth rate since 2023. Exports, consumer spending, and business investment all improved, showing some underlying strength in the economy heading into the second half of the year. The question now is how much of that momentum can continue with the new tariffs in place.
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