Trade War Impact: Ontario, Manitoba, and Quebec Likely to Feel the Brunt.

The trade war between the US and Canada is expected to affect Ontario, Manitoba, and Quebec the most. Despite this, the iShares S&P / TSX 60 Index ETF (TSE:XIU) gained fractionally in trading. Economists predict that the automotive sector will be hit hard with mounting tariffs and a shift to electric vehicles. Analysts have a Moderate Buy consensus rating on TSE:XIU shares.

Title: The Trade War's Impact on Ontario, Manitoba, and Quebec: A Regional Economic Perspective

The ongoing trade war between the United States and Canada has sparked significant regional disparities across the country, with Ontario, Manitoba, and Quebec expected to bear the brunt of the trade tensions. Despite these challenges, the iShares S&P/TSX 60 Index ETF (TSE:XIU) gained fractionally in trading, reflecting a moderate buy consensus rating among analysts.

Economists have identified a growing regional disparity in Canada, where western and eastern provinces are expected to perform better than the central provinces. The trade war is particularly challenging for Ontario, Quebec, and Manitoba, which face higher tariffs and uncertainty that is negatively impacting their economic growth. Laura Gu, senior economist for Desjardins Group, predicts that these central provinces will face steeper headwinds and could potentially enter recessions in the coming quarters [1].

Ontario, with its heavy manufacturing base, is particularly vulnerable. The province's auto sector, which employs over 135,000 people, is struggling with both U.S. tariffs and the transition to electric vehicles. The combination of these factors has led to plant shutdowns, shift reductions, and delays in electric vehicle investments. Desjardins Group expects Ontario to enter a technical recession as early as Q2 2025 [1].

Quebec, with its large manufacturing sector, especially in aluminum, is also heavily exposed to the trade war. The province faces a 50% tariff on aluminum from the United States, which is expected to lead to a technical recession soon, as exports fall and uncertainty weighs on business investment [1].

Manitoba, with a significant agricultural sector, is also underperforming. The province's exports of canola, pork, and peas face stiff duties from the U.S. and China, making it one of the most affected by the trade war. Desjardins estimates that Manitoba faces the third-highest effective tariff rate behind Ontario and Quebec [1].

Despite these challenges, the iShares S&P/TSX 60 Index ETF (TSE:XIU) has shown resilience. The index gained fractionally in trading, reflecting a moderate buy consensus rating among analysts. This indicates that investors remain cautiously optimistic about the long-term prospects of the Canadian market, despite the regional economic challenges posed by the trade war.

The trade war has also sparked calls for an end to the tariffs from mayors in states that border Canada. Mayors from Columbus, Ohio, and Rochester Hills, Michigan, argue that the trade war has harmed businesses and workers in their communities and upended one of the world's most successful economic relationships [2]. They emphasize the importance of trade and cooperation in driving economic growth and prosperity.

In conclusion, the trade war between the U.S. and Canada is expected to have a significant impact on Ontario, Manitoba, and Quebec. While these provinces face economic challenges, the iShares S&P/TSX 60 Index ETF (TSE:XIU) has shown resilience, reflecting a moderate buy consensus rating among analysts. The trade war underscores the need for cooperation and stable trade policies to support economic growth and prosperity.

References
[1] https://ca.finance.yahoo.com/news/posthaste-three-provinces-most-risk-120039617.html
[2] https://www.ttnews.com/articles/mayors-stop-trade-war-canada