For a while this year it is seemed like every day, another executive order was signed in the Oval Office. And how could we forget the shock and horror of “Liberation Day” when U.S. President

Donald Trump unveiled sweeping new tariffs on countries around the world.

Since he took office, Trump has unleashed an onslaught of trade measures unprecedented since the Second World War. The average

U.S. tariff rate on imports now stands at between 17 and 19 per cent. That’s up from two per cent at the start of the year and the highest since the 1930s.

So can we expect relief when Trump’s term ends in 2028? Probably not, says National Bank of Canada economist Angelo Katsoras

in a recent report. The world is unlikely to see a return to the level of free trade that has prevailed in recent decades, he said, because support for protectionist measures has grown in the United States — even across party lines.

When Joe Biden took over after Trump’s first term he kept many of his predecessor’s tariffs on China and even expanded them. Biden’s

Inflation Reduction Act rewarded favoured domestic industries with subsidies and forced Canada and other countries to increase their own subsidies to stay competitive.

Future presidents are also unlikely to want to give up the power that Trump has claimed, argued Katsoras.

Trade authority in the United States was already shifting from Congress to the executive branch before Trump took office, but the president put that into overdrive by using emergency powers to impose tariffs.

“The next president, regardless of party, is not going to want to give up all the cool powers Trump collected for the presidency,”  said Ryan Young of the Competitive Enterprise Institute, quoted in the report.

Nor are industries that have benefited from tariffs likely to let them go easily. “Once tariffs are imposed, the industries that benefit typically lobby hard to keep them in place,” said Katsoras.

As for the legal challenges facing the White House’s tariffs, if the Supreme Court does end up ruling against them, there are plenty of legal options Trump can use instead.

“Regardless of the legal outcome, these options, combined with the negative economic impact of uncertainty, will continue to exert pressure on trading partners to negotiate,” he said.

Last but certainly not least, tariffs pull in a lot of money for a government deep in debt. The Congressional Budget Office estimates that tariffs introduced by Trump could hike U.S. government revenues by $4 trillion over the next 10 years. As imposing tariffs is easier for politicians than raising taxes, future administrations are less likely to eliminate them.

“A national sales tax, for example, would likely be considered political suicide in the United States,” said Katsoras.

So where does this leave Canada? Right now, the country’s position is enviable among U.S. trading partners. U.S. tariffs on Canadian imports averaged less than 5 per cent, while other countries face an average of 10 per cent, which could rise to 18 per cent by the end of the year, giving Canada a competitive advantage.

To keep that edge, Canada will need to align itself with U.S. policy on trade and “other geopolitical priorities,” said Katsoras. This has already been seen when Ottawa followed the U.S. by imposing a 100 per cent tariff on Chinese EVs and recently rescinded the EV mandate.

“Like smaller neighbouring countries compelled to align with China and smaller member states compelled to align with the EU, Canada often has little choice but to follow Washington’s lead,” he said.

Even so, the bottom line is that “a return to the era of freer trade seen in the recent past remains unlikely — underscoring the need for Canada to reassess its industrial strategy,” he said.

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Looks like Canada is going to dodge a recession this time. Gross domestic product rose 0.2 per cent in July, we learned Friday, with an advance reading suggesting no growth for August. If the September reading comes in at zero or better, the third quarter will register gains, though probably below 1 per cent, said economists.

Still plenty of room for improvement, and most expect the Bank of Canada will cut again. Not only do Desjardins Group economists predict the central bank will reduce its interest rate in October, but they also say the rate will need to fall to 2 per cent to support the economy. The Bank of Canada cut its rate to 2.5 per cent on Sept. 17.

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A 72-year-old is looking for ways to reduce taxes on the estate he will leave to his four children. He has topped up his tax-free savings account (TFSA) but is now at the age where he has to make yearly registered retirement income fund (RRIF) withdrawals which elevate his pension income and raise his taxes. FP Answers has some strategies to consider, including family tax shelters.

Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@postmedia.com with your contact info and the gist of your problem and we’ll find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course).

McLister on mortgages

Find out more Want to learn more about mortgages? Mortgage strategist Robert McLister’s

Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his

Financial Post on YouTube

mortgage rate page for Canada’s lowest national mortgage rates, updated daily. Visit the Financial Post’s YouTube channel for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.

Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

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