August 25, 2026
U.S.-Canada Tariffs: Three Scenarios and Their Implications
KEY SUMMARY POINTS
- The direct economic impact of the latest U.S.-Canada tariff escalation appears manageable.
- The bigger risk is not the tariff math itself, but the duration of uncertainty and risk of further escalation.
- A negotiated resolution remains the most likely outcome, but investors should assess the issue through scenarios rather than headlines.
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About the Author
Lorne Gavsie is Senior Vice-President and Head of Macroeconomic & FX Strategy at CI Global Asset Management.
As Senior Vice-President and Head of Macroeconomic & FX Strategy, Lorne Gavsie leads CI Global Asset Management's global macro platform and serves as portfolio manager for the firm's currency strategies. He contributes to the asset allocation process and oversees the firm’s long-term asset class return framework, which informs investment strategy and portfolio construction.
Lorne has more than 25 years of experience in global financial markets, including senior leadership roles in Toronto and London. He holds a joint MBA from the London School of Economics and Political Science, HEC Paris and NYU Stern School of Business, and is a member of the Bank of Canada's Canadian Foreign Exchange Committee. He also serves on the Executive Board of the International Dyslexia Association, Ontario Branch.
About the Author
Neil Shankar is CI Global Asset Management’s Economist, responsible for monitoring key macroeconomic trends and shaping CI GAM’s economic outlook. He actively participates in investment and asset allocation discussions, helping guide decision-making.
A leading contributor to CI GAM’s Capital Insights publication, Neil shares in-depth perspectives on evolving economic conditions. He also frequently engages with stakeholders throughout the organization and externally, helping to deepen understanding of the economic landscape. He is regularly quoted in the press for his views on the economy and markets.
With over 10 years of industry experience, Neil joined CI GAM in 2024 after holding similar roles at other major Canadian financial institutions. Neil holds an MA in Business Economics from Wilfrid Laurier University and a BA (Honours) in Economics from The University of Western Ontario.
GLOSSARY:
Duration: A measure of the sensitivity of the price of a fixed income investment to a change in interest rates. Duration is expressed as number of years. The price of a bond with a longer duration would be expected to rise (fall) more than the price of a bond with lower duration when interest rates fall (rise).
Volatility: Measures how much the price of a security, derivative, or index fluctuates. The most commonly used measure of volatility when it comes to investment funds is standard deviation.
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Published August 25, 2026
