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More U.S. trade tariffs could drive up federal deficit, say economists

By Jolson Lim      

Economists say that lower economic growth spurred by trade action would make the deficit situation more challenging, but how bad may depend on the severity of Trump's actions.

Prime Minister Justin Trudeau and Foreign Affairs Minister Chrystia Freeland at a press conference on May 31 announcing retaliatory tariffs to U.S. duties on steel and aluminum imports. Ms. Freeland was in Hamilton, Ont., on June 29 to announce the government's plans to offer up to $2-billion in support of the affected industries and workers. The Hill Times photograph by Andrew Meade

If Washington further escalates its trade dispute against Canada and other trading partners, it could create a situation that may push the federal government’s finances further into the red, economists say.

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