US President-elect Donald Trump's pledge this week to levy a 25% tariff on all products imported from Canada is clearly more of a bargaining tool than a genuine threat. But it does raise the risk that Canada will be included in a universal US tariff, which we expect to be implemented by the second quarter of next year. We think this would knock no more than 0.6% off GDP, smaller than other estimates, given possible carve-outs for key sectors and an offsetting fall in the loonie.
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