Tariffs explained: How tariffs could impact your life as a university student.

By : Gabriella Rodrigues | VP of Research

Tariffs are the talk of the town- every news website, political debate and conversation currently involves the topic of tariffs. But what are they, and how do they impact us as university students?

Tariffs explained

Tariffs are a tax on imported goods paid by the person that imports them. A 25% U.S. tariff means that any goods Americans will pay a 25% tax on goods they buy from Canada. This leads to a few outcomes: taxes will go toward the government, which Trump plans to use to reduce the amount of income tax charged, and Americans will buy less from Canada to avoid paying taxes, supposedly spurring the American economy. 

Canada imposed a retaliatory 25% tariff, which acted as a form of economic pressure to persuade  President Trump to remove tariffs. This is why the news calls these conflicting tariffs a “trade war.” Each side is firing shots at the other in the form of economic coercion.

Impact on Canadian businesses

Ontario Premier Doug Ford estimated that up to 500,000 Ontarians could lose their jobs due to tariffs (Jones, 2025). American companies might cut contracts with Canadian companies to avoid paying more. Canadian companies will also suffer if they need to buy American products, then lose customers because they have to raise their prices. Consumers also typically buy less in times of uncertainty, like tariffs. Approximately 40% of Canadians reported a fear of losing their jobs as businesses might cut staff to save money (Morrison, 2025). 

Inflation

The Bank of Canada cut the interest rate to 2.75% to offset a potential rise in inflation that tariffs could cause. Their research showed that to offset tariffs, businesses would need to raise their prices (Benchetrit, 2025). Less spending by businesses and consumers tends to put downward pressure on inflation, but rising costs could also trigger inflation, hence why the Bank lowered interest rates. There are some positives, such as lower mortgages and cheaper borrowing. However, lower interest rates mean that savers will earn less interest on their savings accounts. Lower interest rates can lead to increased demand, which, if not managed carefully, could push inflation higher. 

Your life

Canadian imposed counter-tariffs mean you could be spending more on products. If Canadian companies need materials from the U.S., they will likely pay the tariff but increase the price of the product they are selling. American companies that you buy from will also likely increase the prices Canadians pay, to avoid making a lower profit. Overall, when Canadian businesses struggle, the economy slows, inflation rises, and prices everywhere go up. That means you could be paying more on gas, food, rent, etc. The Bank of Canada is cutting the interest rate to try and avoid this, but inflation could still rise. 

While it might be scary to think that life could become harder to avoid, there are some things that you can do to help:

• Stay informed: Don’t let fear-mongering get to you. Read official sources like the CBC and CTV (which are free) or publications from the Government of Canada.

• Support Canadian: buy from small, local businesses when you can. If they close because they do not receive enough support, it impacts the owners, the people who work there, and the economy. If we stop spending money altogether, the problem could become worse, and prices could continue to go up. 

• Vote smart: in the next federal elections, look at the strategies each federal elect has to spur the economy and negotiate with American politicians. Our prime minister and government have a huge impact on how these types of issues play out. 

References

Bank of Canada cuts interest rate to 2.75% as country faces 'new crisis' from tariffs. (2025, March 12). CBC News. https://www.cbc.ca/news/business/bank-of-canada-march-12-2025-1.7481284

Jones, A. (2025, January 14). Tariffs from U.S. could cost up to 500,000 Ontario jobs, Ford says. The Canadian Press. https://www.cbc.ca/news/canada/toronto/us-tariffs-could-cost-ontario-jobs-ford-1.7430645

Morrison, C. (2025, March 13). New poll suggests 40% of Canadians fear losing their jobs due to Trump's tariffs. The Canadian Press. https://www.ctvnews.ca/business/article/new-poll-suggests-40-of-canadians-fear-losing-their-jobs-due-to-trumps-tariffs/