U.S. election: What would Harris, Trump economic plans mean for Canada?

As U.S. Vice-President Kamala Harris and Donald Trump fiercely battle for the White House in the U.S. election, they’ve largely focused their messages on the economy — and Canada is listening closely.
More than 90 per cent of voters in a recent Ipsos poll said the economy and their personal economic situation will factor into how they cast their votes, far ahead of all other issues identified as important in the election.
That reflects how most Americans, like Canadians, feel the cost of daily life remains difficult after two years of high inflation, which peaked in the aftermath of the COVID-19 pandemic but has cooled more recently.
Each candidate has taken different approaches to explaining how they will tackle the economy. Harris has detailed a series of proposals to lower costs for Americans, including targeted tax breaks, health-care coverage improvements and financial help for first-time homebuyers. Trump, meanwhile, has focused almost exclusively on tariffs on foreign imports and energy production, which he claims will boost funding for social supports and businesses.
The same Ipsos poll found Trump with a slight edge with voters who trust him on the economy, but that lead has narrowed since Harris became the Democratic nominee in July.
Canada is bracing for how hardline U.S. economic protectionism could get in the next four years, and how an upcoming review of North American free trade negotiations could shake out under a Trump or Harris administration.
Here’s a look at what Harris and Trump have proposed on the economy, and how Canada could be impacted.
Harris has mostly been non-specific about how she would address international trade and other global economic issues, which has many researchers and analysts believing she will continue U.S. President Joe Biden’s policies. Those have prioritized incentives to boost American manufacturing while retaining foreign trade partnerships.
Instead, Harris’s economic platform is primarily focused on building an “opportunity economy” at home, which she says will benefit the middle class.
Her policy proposals include expansion of the child tax credit and earned income tax credit to more recipients, and capping taxes for those earning up to US$400,000 per year.
For wealthy Americans, Harris proposes enacting a minimum tax rate for billionaires and upping the rate on long-term capital gains for those earning at least $1 million a year to 28 per cent.
She has called for providing first-time homebuyers with up to US$25,000 to assist in a down payment, and to spur the building of three million new homes and rental units across the U.S. by cutting federal red tape and introducing tax cuts for homebuilders.
A Harris administration would also crack down on “bad actors” in the real estate and grocery sectors who inflate consumer costs to boost profits, which the campaign calls price gouging.
Harris has vowed to continue Medicare negotiations with pharmaceutical companies that began during the Biden administration to reduce and cap prescription drug prices, which have lowered insulin prices to $35 a month for seniors. She also says she will expand Medicare to cover at-home care for families.
Other legislative priorities Harris says she will pursue are paid family and medical leave, raising the federal minimum wage, and eliminating taxes on tip for service and hospitality workers — the last of which was first publicly proposed by Trump.
Trump’s economic plan is almost the reverse of Harris’, with a large focus on international trade tariffs that he says will raise billions of dollars for the domestic economy and force companies to revert their supply chains to the U.S. He has also tied illegal immigration to economic harm and claims his restrictions will bring back jobs for Americans.
At the core of Trump’s platform is a blanket 10-to-20 per cent tariff on all foreign imports except goods from China, which he says will face tariffs of at least 60 per cent. Select companies that Trump views as harmful to U.S. interests — such as Chinese auto companies looking to build manufacturing bases in Mexico — may face even higher tariffs, he has said.
Trump also says he will boost U.S. energy production — in part by opening up federally-protected lands — as well as homebuilding and domestic manufacturing by imposing widespread regulatory cuts that he says will allow businesses to grow and add jobs.
Besides eliminating taxes on tips, Trump’s public kitchen-table economic proposals are relatively thin. He has answered most questions on how he would pay for child care and affordable homes by pointing to his tariff policies.
He also aims to make the tax reforms he passed during his first term permanent, and has promised another tax cut for middle- and lower-class families, as well as eliminating income taxes on Social Security benefits.
One idea Trump floated early in his campaign — building new “freedom cities” on federal land that will not just include new homes for Americans, but also flying cars — is not included in his official campaign platform.
Canada will almost certainly be keen to see if either Harris or Trump manage to boost homebuilding and bring down house prices, which have risen steeply since 2020, and whether those ideas can be replicated here.
Harris’ late entry into the presidential race means her economic agenda is still being assessed. So far, experts believe she will maintain the status quo from the Biden administration on the international stage with potential increases in both spending and tax revenue at home.
Most of her domestic proposals, particularly on tax credits, would require approval from Congress — making Democratic control crucial to enacting her vision.
Kimberly Clausing, an economist and senior fellow at the Peterson Institute for International Economics (PIIE), told Global News that Harris’ affordability measures are “modest improvements that would push things in the right direction” for Americans but won’t lead to macroeconomic impacts that would affect key trading partners like Canada.
“I don’t think Canada will notice a Harris administration that much,” she said, noting Harris doesn’t represent a drastic change from the “weighted average” of the Obama and Biden administrations.
Harris has said she would reopen negotiations for the Canada-United States-Mexico Agreement (CUSMA) when it comes up for review in 2026 to ensure businesses in valuable manufacturing sectors aren’t incentivized to move their business to Canada or Mexico. But experts say those negotiations will likely be smoother with a Harris administration than a Trump-led White House.
Canadian officials and researchers are far more focused on the potential ramifications for Trump’s blanket tariffs, which would likely not require approval from Congress.
Economists almost uniformly agree that tariffs ultimately raise prices for consumers as companies look to make up for the higher cost of importing. Clausing and her PIIE colleagues estimated in an August report that the tariffs would cost a typical American household an extra US$2,600 per year on average.
A Scotiabank Economics report from April estimated Trump’s tariffs — and retaliatory levies from affected countries on U.S. exports — would reduce America’s GDP by more than two per cent in two years and raise inflation and interest rates. But the report said Canada would be hit worse, with a GDP hit of 3.6 per cent, given it reliance on trade with the U.S.
The Canadian Chamber of Commerce says $3.6 billion worth of goods and services cross the U.S.-Canada border every day.
“Any disruption to that cross-border supply chain has an outsize impact on small businesses in Canada and the economy as a whole,” said Jasmin Guenette, vice-president of national affairs at the Canadian Federation of Independent Business.
Trump has also vowed to reopen CUSMA with a focus on stopping China from taking advantage of the trade pact’s North American origin rules for auto manufacturing. But economists at the Bank of Montreal have warned the entire agreement was at greater risk of being scrapped or redrawn altogether under a Trump administration — particularly if Republicans control Congress.
Researchers also say Trump’s economic plans would increase the U.S. government deficit at nearly twice the rate as Harris, and that any economic benefit from proposed tax cuts and regulatory easing would be offset by tariff impacts.
Desjardins chief economist Jimmy Jean told Global News that Trump’s potential second term in office would be “much more disruptive” than a Harris regime, and could even lead to a recession in Canada.
—with files from Global’s Craig Lord