Extrapolating that view to the Canadian economy, they forecast that a Republican sweep of both the presidency and Congress — which would facilitate the implementation of its agenda — would be the worst outcome for Canada.
To start, a Republican rout would “likely lead” to lower global and U.S. real GDP and higher tariffs on U.S. imports that would reduce demand for Canadian exports, the report said.
Additionally, increased energy production under a Republican administration would likely mean lower commodity prices, “reducing aggregate corporate profits and household incomes in Canada,” it said.
Some of these negative effects could be cushioned by corporate tax cuts and weaker regulation that support corporate profits and equity values, the economists noted.
“[A] rally in U.S. equities could be expected to have some positive spillovers to Canadian equities in the short term. However, the S&P/TSX would…
