United States President Donald Trump’s tariffs are rattling consumer confidence in one of the U.S.’s largest trading partners, with 65 per cent of Canadians saying they expect the economy to weaken over the next six months.

That’s the highest percentage of people with a negative economic outlook since June 2020, which was the early part of the COVID-19 pandemic. Just nine per cent said they believe the Canadian economy will strengthen over the next six months, according to the poll by Nanos Research for Bloomberg News.

The survey underscores how Trump’s trade policy has shaken up the northern nation. The president has made several tariff threats — including 10 per cent levies on energy, 25 per cent on steel and aluminum, 25 per cent on cars and trucks, and 25 per cent on most everything else the U.S. buys from Canada. The administration hasn’t implemented any of those tariffs yet.

A prolonged trade war would reduce Canadian exports and total output, likely driving the country into recession. Economists have already trimmed their growth estimates for the year, forecasting an expansion of 1.6 per cent, down from 1.8 per cent in last month’s Bloomberg survey.

“The threat of tariffs against Canada has put a wet blanket on consumer confidence,” said Nik Nanos, the polling firm’s founder.

Bank of Canada governor Tiff Macklem warned Friday that a U.S.-Canada tariff war has the potential to hurt Canadian output by nearly three per cent over two years and do lasting damage to the economy.

Trump has expressed irritation with Canada on issues such as border security, military spending and its trade deficit with the U.S. Last year, the U.S. sold about US$350 billion worth of goods to Canada and bought US$413 billion from it, resulting in a goods trade deficit of US$63 billion. In services, the U.S. runs a trade surplus with Canada.

Canada buys more U.S.-made products than any other country, and nearly as much as the European Union, according to data from U.S. Department of Commerce.

The increasingly dark mood dragged the Bloomberg Nanos Canadian Confidence Index to 49.3 last week, compared with 50.8 in late January. The index is based on Canadians’ perceptions of their personal finances, job security, the real estate market and the economy. A reading under 50 indicates that negative views outweigh positive ones.

Confidence was lowest in Ontario and British Columbia, regions that are home to export-sensitive automotive and natural resource industries such as lumber. Canadians under 30 years of age are more optimistic than those 50 and older, Nanos found.

Nanos surveys about 250 Canadians weekly for their views on the economy. Bloomberg publishes four-week rolling averages of the 1,000 telephone responses. The poll has a margin of error of about three percentage points, 19 times out of 20. The range of error may be wider when talking about subsets of the overall population because the sample size is smaller.

Bloomberg.com