Canada’s banks weather the trade war as tariffs test the economy

Floyd Brenz., Philippine Canadian Inquirer
August 26, 2026

Photo Courtesy: CBC News

CANADA – U.S. tariffs may have spared Canada’s biggest banks from a direct financial hit, but the escalating trade war could still threaten their bottom line by weakening the economy and putting borrowers under pressure.

Major lenders say the current impact remains manageable, with Scotiabank reporting that the latest tariffs directly affect less than 1 percent of its total loan portfolio.

The bigger concern is indirect exposure. Banks hold trillions of dollars in mortgages, car loans, credit cards and business loans—making them vulnerable if the trade conflict triggers job losses, weaker businesses or slower economic growth.

Scotiabank CEO Scott Thomson said the country’s economic fundamentals remain strong, while BMO CEO Darryl White likewise described the potential impact as manageable.

Their confidence comes despite U.S. President Donald Trump’s 50 percent tariffs on about C$28 billion worth of Canadian products, prompting the government to provide financial assistance to affected businesses.

For now, the banks appear confident they can weather the storm. But if tariffs begin hitting jobs, businesses and household incomes, the real cost of the trade war could eventually land on the people carrying the debt.