Navigating the U.S. and China Trade Wars: Implications for Canada's Economy and the Construction Industry

By Build Now Construction

In recent months, escalating trade tensions have led to the imposition of significant tariffs by both the United States and China on Canadian goods. These measures are poised to impact various sectors of the Canadian economy, with the construction industry standing at the forefront. At Build Now Construction, our unwavering commitment to utilizing exclusively Canadian-made products and craftsmanship not only supports our national economy but also offers a strategic advantage in these turbulent times.

The Genesis of the Trade Disputes

United States Tariffs:

On February 1, 2025, the U.S. administration imposed a 25% tariff on imports from Canada and Mexico, citing concerns over national security and trade imbalances. A lower 10% tariff was applied specifically to Canadian energy exports, including electricity, natural gas, and oil, to "minimize any disruptive effects" on the energy sector. These measures disrupted the longstanding trade relationship underpinned by agreements like the United States-Mexico-Canada Agreement (USMCA). In retaliation, Canada announced counter-tariffs on U.S. goods worth $155 billion, aiming to protect its economic interests.

China's Retaliatory Tariffs:

In October 2024, Canada imposed a 100% tariff on electric vehicles manufactured in China, followed by a 25% tariff on Chinese steel and aluminum products, citing concerns about market distortion and unfair competition. In response, on March 8, 2025, China announced retaliatory tariffs on several Canadian agricultural exports, including a 100% tariff on rapeseed oil, peas, and oilcakes, and a 25% tariff on aquatic products and pork, effective from March 20, 2025.

Economic Ramifications for Canada

The imposition of these tariffs is expected to have profound effects on Canada's economy:

Gross Domestic Product (GDP): The Bank of Canada has expressed concerns that these measures could disrupt economic growth, leading to a potential contraction in GDP.

Employment: Industries heavily reliant on exports to the U.S. and China, such as manufacturing and agriculture, may face job losses. Estimates suggest that up to 2.5% of Canadian employment could be affected, translating to over 510,000 jobs.

Inflation: Increased costs of imported goods due to tariffs are likely to drive up consumer prices, contributing to inflationary pressures.

Impact on the Construction Industry

The construction sector is particularly vulnerable to these trade tensions:

Material Costs: Many construction materials, including machinery and equipment, are imported from the U.S. The 25% tariff elevates the costs of these essential items, leading to increased project expenses.

Project Delays: Elevated costs and supply chain disruptions can result in project delays, affecting timelines and budgets.

Housing Affordability: Rising construction costs may be transferred to consumers, exacerbating housing affordability issues. For instance, similar tariffs have previously led to increased home prices in regions like the Bay Area.

Build Now Construction's Commitment to Canadian Excellence

In this challenging landscape, Build Now Construction's dedication to sourcing 100% Canadian-made products and employing local craftsmanship offers distinct advantages:

Economic Support: By choosing Canadian suppliers, we bolster the domestic economy, supporting local businesses and preserving jobs.

Price Stability: Relying on Canadian materials shields our projects from volatile international tariffs, ensuring more predictable pricing for our clients.

Sustainable Practices: Local sourcing reduces transportation emissions, aligning with our commitment to environmental responsibility.

The Importance of Supporting Local Businesses

The current trade environment underscores the necessity of supporting local enterprises:

Economic Resilience: Patronizing Canadian businesses fosters economic resilience, reducing dependency on foreign markets.

Community Development: Local businesses reinvest in their communities, promoting regional development and prosperity.

Quality Assurance: Canadian products are subject to stringent quality standards, ensuring superior outcomes for consumers.

Conclusion

The ongoing trade tensions with both the United States and China present significant challenges, particularly for sectors like construction. However, Build Now Construction's steadfast commitment to Canadian products and craftsmanship positions us to navigate these obstacles effectively. By focusing on local resources and expertise, we continue to deliver exceptional value to our clients while contributing positively to Canada's economic fabric.

"At Build Now Construction, we believe that building with Canadian products isn't just a business choice—it's a commitment to our nation's future" says Jacob Postma Founder & Owner Build Now Construction.

Note: The information provided reflects the current trade situation as of March 10, 2025. Trade policies are subject to change, and ongoing developments may influence future economic conditions.

Sources:

Reuters: China hits back at Canada with fresh agriculture tariffs

Reuters: China says it will grow relations with Canada on basis of mutual respect

The Guardian: Wall Street falls again as tariff fears grip markets

Wikipedia: Canada–China trade war

Reuters: Trump says Canada may soon get reciprocal US tariffs on dairy, lumber

[NPR: China and Canada strike back