Over the past few weeks, we’ve heard the growing discussion around tariffs, and this week is when the impact really starts to take effect. While much of it may feel out of our control, what can Canadians actually do as consumers to soften the blow? NerdWallet Canada’s financial expert, Clay Jarvis, breaks it all down, sharing practical tips Canadians can use now and in the months ahead.
“There’s still a vague sense of disbelief that the trade war between Canada and the U.S. has become so ugly and chaotic. But with (US President Donald) Trump failing in Iran and sinking in the polls as the mid-term elections approach, he’s in a position the world knows he can’t handle,” said Jarvis.
“Which is why the trade war is likely to grind on. If Trump can’t win, then somebody else has to lose. In this case, it’s Canada; or more specifically, (Canadian Prime Minister) Mark Carney.”
What can Canadians expect over the next few months?
- Higher prices. Canada’s latest batch of counter-tariffs affect a wide range of consumer goods, including beauty supplies, milk products, clothes, home appliances and exercise equipment.
- Decreased imports. Trump’s double-shot of tariffs (August 22) and import bans (September 8) will put renewed pressure on companies who rely on crossborder business.
- A quiet fall housing market. Trump’s looming 50% tariffs on Canadian autos and steel, slated for January 1, 2027, could flatten home buying demand in Ontario and Quebec.
How can consumers prepare?
- Get those elbows up. Many of Canada’s counter-tariffs on affected U.S. goods are 25% or 50%. Avoiding impacted goods could save you some real money. Buying Canadian supports home grown businesses when they really need it.
- Do some bulk shopping ASAP. If there are impacted goods from the U.S. you can’t live without, snap them up before you have to pay tariff-boosted prices.
- Re-allocate some of your paycheque. Consider funnelling a little extra money into your emergency fund rather than investments over the next few months. The liquidity could come in handy if your income is disrupted or inflation starts to bite.
- Home buyers, have a long chat with a mortgage broker. The ‘fixed vs. variable’ decision is especially fraught right now. Get some professional advice around the short- and long-term impact of your rate decision.
Jarvis spoke to Retail Insider about the issue.
Question: Which categories of consumer goods are most likely to see noticeable price increases as Canada’s latest counter-tariffs take effect, and how quickly could those increases reach shoppers?
Answer: I think Canadians will want to watch out for items like milk and cheese, or beauty products, which they buy regularly. A lot of household appliances are about to get dinged, too.
When shoppers actually have to pay higher prices is really up to retailers. They might try to absorb some of the higher costs for a while, or they might pass them on to customers as soon as their first tariff-impacted shipments arrive.
In a trade war as chaotic as this one, it’s really hard to predict when something is going to happen, which is partially why it’s so frustrating for consumers.
Q: For Canadians trying to reduce the impact of tariffs on their household budgets, when does buying Canadian or choosing non-U.S. alternatives make the most financial sense?
A: Buying Canadian goods only has a positive financial impact if the Canadian product is cheaper. That’s not always the case. When life is as expensive as it is today, you can’t blame someone for choosing the less expensive product, regardless of where it originates,
Q: Is bulk-buying tariff-affected U.S. products before prices rise a sound strategy for consumers, or are there risks of overspending or buying more than they need?
A: Overspending can be a legitimate risk when you’re buying bulk. You can mitigate that risk by buying non-perishable products or only stocking up on items that you know your household will make use of.
Q: With the potential for higher prices and economic uncertainty, how much should Canadians prioritize building or increasing their emergency savings over investing in the coming months?
A: I think it’s a trade-off worth considering for some households. If you’re worried about a job loss or needing more cash on hand for a period of higher prices, it might make more sense to keep your cash where it’s accessible and free from risk.
Q: What specific advice would you give to Canadian consumers who are already feeling financially stretched and have little room in their budgets to absorb higher prices?
A: This is a tough one. So many Canadians are doing the right things — watching their spending, paying down their debt — and still suffering. I think it’s really important to remember that your finances don’t define who you are, and to talk about your financial stress with someone you trust.
NerdWallet Canada has some great resources for those dealing with financial stress: How to Cope with Financial Stress and Trauma
More from Retail Insider:
