Part 6/13:
However, recent tariff hikes—such as Trump's decision to raise tariffs on Canadian goods to 35%—have strained economic ties and contributed to Canada's second-quarter contraction. Canada responded by removing most retaliatory tariffs, maintaining measures only on products facing US levies. Meanwhile, Canadian fiscal policy faces its own challenges; the country's deficit is projected to reach approximately 100 billion CAD ($72 billion USD) this year, driven by extensive infrastructure and defense investments aimed at boosting productivity. The upcoming November 4 fiscal update is deemed one of the most consequential in recent history, with optimism among business leaders about stronger US-Canada economic collaboration—if political and trade hurdles can be overcome.