President Trump's decision to raise tariffs on certain Canadian exports has added new strain to Canada's trade-dependent economy. After failed negotiations, tariffs on some Canadian goods increased to 35 percent, with key industries like autos, steel, and aluminum facing particularly steep duties. While the impact on the broader economy has been somewhat cushioned by exporters adapting to new paperwork requirements, sectors directly affected by the highest tariffs are experiencing significant challenges. The Bank of Canada projects that, unless further tariffs are imposed, the economy may stabilize and gradually recover, but warns that additional measures could lead to further contraction. Canadian leaders are now re-evaluating the nation's heavy reliance on trade with the United States as global trade dynamics shift.