The signs have been there all along, but now the evidence is clear: U.S. President Donald Trump’s tariffs have been killing Canadian economic growth.

The economy contracted more than many economists expected in the second quarter of 2025, reigniting fears that a “technical recession” — defined by two consecutive quarters of negative gross domestic product (GDP) — is looming.

Canada’s GDP fell by 1.6 per cent on an annualized basis, following a two per cent gain in the first three months of the year, Statistics Canada reported Friday.

This is the first blow to economic activity attributed almost entirely to Trump’s erratic trade war. The weakness in the second quarter largely came from “significant” declines in goods exports as well as less business investment in machinery and equipment, StatCan said.