The global economy is experiencing significant challenges and uncertainties. Many countries are implementing tariffs and other trade measures in an effort to support domestic industries. However, the economic implications of these policies are complex.
Understanding Tariffs and Their Impact
1) Who Pays for Tariffs?
Tariffs are taxes imposed on imported goods—but they are ultimately paid by importers, businesses, and consumers in the country imposing them. Businesses often pass these costs onto customers, increasing the price of goods.
Additionally, tariffs can create indirect costs for exporting countries. If a country sells raw materials to a nation that imposes tariffs and later imports finished goods made from those materials, it will also face higher prices due to tariff markups.
Example: The Double-Tariff Effect
Imagine Canada exports crude oil to a trading partner that imposes a 10% tariff. That oil is refined abroad and then re-imported. The refinery must recover its costs, so it adds:
✔ 10% for the tariff cost
✔ Profit margin on top of that
This results in a higher final cost than the tariff itself, as businesses don’t just absorb the costs—they mark them up.
2) The Broader Economic Consequences of Tariffs
- Tariffs act as a tax, but their net benefit is uncertain – Governments collect revenue from tariffs, but they often need to subsidize struggling industries, offsetting the gains.
- Tariffs pick winners and losers – For example, steel tariffs may benefit steel producers but harm industries relying on steel, such as construction and auto manufacturing.
- Tariff retaliation can escalate trade wars – Countries often respond with counter-tariffs, making global trade more expensive and unpredictable.
Where Will Tariffs Lead Canada?
1) Risk of Economic Slowdown
Canada is an export-heavy economy, with 30% of GDP tied to exports. 75% of those exports go to our largest trading partner. Industries like oil & gas, automotive, steel, and agriculture are vulnerable to tariff policies.
A prolonged trade dispute could weaken demand for Canadian goods, affecting GDP growth and job security.
2) A Weaker Canadian Dollar (CAD)
Tariffs can contribute to a lower CAD, which has two key effects:
✔ Makes exports more competitive – Canadian products become cheaper for foreign buyers.
✔ Makes imports more expensive – Companies either pass higher costs to consumers or absorb them, reducing profits.
3) Bank of Canada’s Response: Interest Rate Adjustments
If economic growth slows, the Bank of Canada may lower interest rates to stimulate investment and spending. However, if tariffs increase inflation by making goods more expensive, the Bank may hesitate to cut rates. This creates uncertainty for businesses.
Does This Mean Canada Is Doomed?
Absolutely Not!
Canada has weathered economic storms before, and we will do it again. Tariffs, trade disputes, and global challenges do not define us—our resilience, innovation, and adaptability do.
Here’s why Canada will rise above this:
1) We are a $2 trillion economy with a highly skilled and educated workforce with world-class industries.
2) Canadians are hardworking, innovative, and determined—we don’t back down in the face of adversity.
3) We have strong global trade agreements that allow businesses to expand beyond North America.
4) 70% of our economy is built on domestic trade—we have the power to support each other and grow from within.
This is not the time to panic—it’s the time to act. Canada’s future remains bright, but businesses must adapt, innovate, and take advantage of new opportunities.
How Canadian Businesses Can Adapt
Given these uncertainties, businesses must take control of what they can—by strengthening their presence, diversifying their markets, and optimizing their strategies. While tariffs and global economic shifts are beyond individual control, businesses can adapt by refining their digital presence, reaching new customers, and ensuring their marketing efforts are as effective as possible.
A well-structured digital marketing plan is essential for businesses looking to navigate uncertain times. It’s no longer just about having a website or social media presence—it’s about ensuring that your brand is visible, competitive, and strategically positioned to attract the right audience. Companies that invest in data-driven marketing strategies are better equipped to adjust to market changes, improve their customer acquisition efforts, and strengthen their bottom line.
This Is Where Search Engine People (SEP) Can Help
SEP is a proud Canadian business that can assist in developing and executing a digital marketing strategy. It is a continuous process and one that requires the right mix of planning, implementation, monitoring, and ongoing optimization.
✔ If you need leads immediately, Google Ads can help you reach customers right away. A well-optimized campaign ensures your budget is spent on the most effective keywords, driving high-quality traffic to your website.
✔ If you're taking a long-term approach due to the uncertainty, SEO can position your business for future success by helping you rank on the first page of Google. Strong SEO ensures that when customers search for your products or services, your business is the one they find first.
Paid Search (Google Ads) for Immediate Results
- Keyword Research & Targeting: Identifying the most valuable keywords for your business.
- Ad Campaign Setup & Management: Ensuring ads are optimized for maximum conversion while keeping costs efficient.
- Ongoing Performance Monitoring: Adjusting ads, bidding strategies, and targeting to improve ROI over time.
SEO for Long-Term Growth & Organic Traffic
- Finding "Trophy Keywords": The most valuable terms to rank for in search engines.
- Website Optimization: Making sure your site is structured for maximum search visibility and user experience.
- Link Building & Authority Growth: Establishing credibility to move your website up in rankings.
Digital Expansion & International Growth
For businesses considering entering new markets, SEP has extensive experience creating custom digital marketing plans for foreign markets.
We help businesses:
✔ Identify key search trends in different countries
✔ Create localized marketing strategies
✔ Optimize websites for international audiences
This allows you to reduce dependence on one market and expand your customer base globally.
Final Thoughts: Canada’s Future Is Bright
Despite economic challenges, Canada remains a $2 trillion economy with a skilled workforce and strong global trade relationships. While tariffs introduce uncertainty, businesses that adapt and innovate will not just survive, but thrive.
At Search Engine People (SEP), we help businesses navigate these challenges through expert digital marketing strategies.
✔ Need leads now? → Our Google Ads team will get you immediate traffic.
✔ Want to secure long-term growth? → Our SEO team will rank your business on the first page of Google.
✔ Looking to expand into new markets? → We create custom international digital marketing strategies tailored to your needs.
This is not the time to sit back—it’s the time to take action, adapt, and grow.
About the Author: Chris Walton
