Royal Bank of Canada (RBC) analysts have evaluated the effects of the recent U.S. Section 338 tariffs on the Canadian labour market, focusing on the September labour report, which is the first comprehensive dataset since the tariffs were implemented on August 22 [1]. According to RBC, approximately 0.4% of Canada’s gross domestic product (GDP) and employment is linked to U.S. demand for goods affected by these tariffs [1].
RBC expects that the new tariffs may have stalled progress in the Canadian labour market but are not significant enough to reverse it [1]. The bank projects a modest increase in total employment for September, estimating a gain of 5,000 jobs, which would keep year-to-date job growth slightly positive [1]. The unemployment rate is anticipated to remain near 6.4%, which RBC considers a more reliable indicator of market conditions [1].
The September labour report is seen as a key indicator of the tariffs' impact, providing important insights into how the Canadian economy is adjusting to the new trade environment [1]. RBC’s analysis suggests that while the tariffs have introduced headwinds, their overall effect on employment and GDP is limited at this stage [1].
CONCLUSION
RBC’s assessment indicates that the recent U.S. tariffs have had a modest, but not severe, impact on the Canadian labour market. While job growth has slowed, the unemployment rate is expected to remain stable, suggesting resilience in the face of new trade barriers.