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    CALCULATORiQ™
    Part of the North American Reset Series

    Trade War Escalation Simulator

    A multi-year model of the Canada-United States tariff conflict and its effect on Mexico. Choose a posture, set the rates, and watch where the output loss lands, which regions carry it, who collects the surplus, and how much of the damage stops being reversible.

    Scenario

    12%
    10%
    5 years
    25%
    80%
    30%

    Sector exposure weights

    22
    27
    9
    11
    6
    25

    Weights are relative. Autos, metals and lumber transmit tariffs hardest because they cross the border several times before final sale. Energy and services transmit least.

    Outcome at year 5

    COSTLY

    Measurable output and price damage on both sides, concentrated in the exposed sectors, but the continental production system remains intact.

    Canada GDP

    -0.95%

    US GDP

    -0.13%

    Mexico GDP

    +0.11%

    Cumulative cost

    $240B

    Canada prices

    +2.93%

    US prices

    +0.97%

    Trade diverted

    15%

    Damage now permanent

    15%

    Output path by economy

    GDP level effect versus a no-tariff baseline. Canada carries roughly nine times the per-point burden of the United States because the same trade flow is a far larger share of its economy.

    Cumulative cost and supply-chain diversion

    Diversion is modelled as a ratchet. Once a purchasing manager qualifies a supplier outside the bloc, the order does not return automatically when the tariff is lifted.

    Walk the timeline

    Year 1

    Applied US rate

    12.0%

    Applied CA rate

    9.0%

    Canadian jobs at risk

    11k

    US jobs at risk

    12k

    Who pays

    Automotive assembly and parts9

    Ontario, Michigan, Ohio

    About 12k jobs exposed at the terminal year

    Heavy crude and refined products8

    Alberta, US Gulf and Midwest refiners

    About 5k jobs exposed at the terminal year

    Cross-border services and logistics labour5

    Border corridors, Atlantic Canada, Great Lakes

    About 7k jobs exposed at the terminal year

    Steel, aluminum and fabricated metal4

    Quebec, Ontario, Indiana, Pennsylvania

    About 7k jobs exposed at the terminal year

    Grain, potash and processed food3

    Prairies, US farm belt

    About 6k jobs exposed at the terminal year

    Softwood lumber and building products3

    British Columbia, US housing market

    About 4k jobs exposed at the terminal year

    Who profits

    Trade counsel and compliance49

    Dispute filings, exclusion requests and origin audits scale directly with the complexity of the tariff schedule.

    Logistics and customs intermediaries39

    Brokers, bonded warehousing, rerouting and rules-of-origin advisory work grows with every new tariff line.

    Domestic substitutes on both sides32

    Protected US and Canadian producers who gain pricing power behind the tariff wall, at the consumer's expense.

    Macro and FX trading desks29

    A politically driven CAD and commodity basis volatility create carry and relative-value opportunities.

    Non-North-American exporters17

    EU, Japanese, Korean and Southeast Asian suppliers filling orders that used to cross the Canada-US border.

    Mexico as the nearshoring valve11

    Assembly and component work relocated south when the northern corridor becomes unpredictable.

    The cost of waiting

    Settle end of year 1

    $35B

    Settle end of year 3

    $123B

    Settle end of year 5

    $240B

    Cumulative continental output loss already incurred by the time a settlement is signed. The gap between these columns is the price of delay, and it is not recoverable.

    Assumptions and method

    This is a transparent scenario engine, not a forecast. Tariff rates evolve by a fixed annual drift set by the chosen posture. The effective rate is the headline rate less exemption coverage.

    Output effects are elasticity based and scaled to approximate GDP levels of roughly 2.45 trillion for Canada, 30.5 trillion for the United States and 2.05 trillion for Mexico, against bilateral goods and services trade in the region of 960 billion per year. Sector sensitivities are higher where components cross the border repeatedly.

    Diversion is a one-way ratchet with diminishing marginal effect, capped at 85 percent of exposed flow. The permanent share reported is that ratchet, not a probability.

    Nothing here is investment, legal or policy advice. Change the inputs and the conclusions change, which is the point of the tool.

    Read the trade war editorial and blueprint Single-line Tariff Impact Simulator