Tariffs Are Driving Up Costs and Discouraging Expansion, Canada's Ambassador Says

What Wiseman told business leaders

Canada's ambassador to the U.S., Mark Wiseman, told the B20 summit in Washington that tariffs are driving up the price of investing and discouraging expansion plans. Hosted by the U.S. Chamber of Commerce, the event heard Wiseman's blunt take: "Uncertainty increases your cost of capital." He added that firms are more likely to build plants, add a new ship and fund R&D when they can count on policy stability.

A former BlackRock executive who became ambassador in February, Wiseman pushed to repeal the levies enacted via U.S. trade law Sections 232 and 338. "The sooner, the better," he said, arguing that clarity would help companies commit to long term projects.

The trade and tariff ledger

Washington and Ottawa are trying to resolve a dispute that reaches into one of America's largest trading relationships. That figure was higher than the comparable window in 2025 - the first year of Donald Trump's second term - but still below each of the equivalent nine-month intervals during Joe Biden's prior three years.

U.S. customs duties on imports from Canada surged to $10 billion in 2025, up from $400 million in 2024, the Congressional Research Service reports. Negotiations, revived after breaking down in August, are focused on reducing duties applied to Canadian steel and automobiles. Talks, restarted after an August collapse, aim to cut the duties levied on Canadian steel and on automobiles. Trump has set tariffs as high as 50% on select Canadian products, prompting countermeasures that hit U.S. exports worth billions of dollars.

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Trump has justified the tariffs as shielding U.S. manufacturers and workers, alleging Canada engages in discriminatory practices that harm U.S. exporters. Politics are shifting too, as Democrats plan to contest the tariffs once they assume control of Congress in January. On Tuesday, Canadian Prime Minister Mark Carney said the Trump administration remains Canada's primary counterpart in negotiations.

Prices, uncertainty and Europe's view

Researchers at the New York Fed concluded that almost 90% of tariff expenses fall on U.S. importers, with roughly one-quarter passed through to consumer goods prices, and they expect additional upward pressure in 2027. That aligns with Labor Department data showing a higher-than-expected 0.4% rise in October consumer prices, intensifying inflation worries after Republicans' sweeping midterm losses.

European ambassadors at the B20 flagged similar risks. Germany's envoy, Jens Hanefeld, said firms can work around tariffs but face an "ever-changing regulatory environment" that compels them to hire more legal help to navigate shifting rules. France's ambassador, Aurélien Lechevallier, pressed for cooperation on AI and energy instead of continued trade fights. "We've spent, I think, a lot of time the last years working and dealing with regulations, tariffs," he said. "Businesses are eager to do more business."

What this means for your portfolio

In plain English: higher tariffs mean higher input costs and more uncertainty, which can slow capital spending and squeeze margins. The Fed's work suggests importers absorb most of the hit, with a slice passed to shoppers and more inflation pressure likely in 2027. Wiseman says removing Sections 232 and 338 tariffs could restore the certainty companies need to invest; without that, big-ticket projects may stay on ice.

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