It’s Tariffs, Not Armageddon

Global trade serves as a cornerstone of economic prosperity, driving growth, shaping market dynamics, and influencing corporate performance across borders. The strategic deployment of trade policies, particularly tariffs, can profoundly alter these dynamics, with far-reaching consequences for revenue streams, cost structures, and financial stability.

This research investigates the impact of U.S. tariffs on imports from key trading partners; Canada, Mexico, and one additional nation—across five critical industries. By forecasting tariff elasticities for each sector, we quantify the trade disruptions and translate these into macroeconomic stressors within our proprietary credit risk frameworks. Our objective is to assess how these tariff-induced shocks affect the creditworthiness of Canadian corporations, a vital consideration for investors, policymakers, and corporate leaders navigating an increasingly protectionist trade landscape.