Canada-U.S. Employment Contrast Shows Trump’s Tariffs are not Working
On August 7 both Statistics Canada and the U.S. Bureau of Labor Statistics released their monthly labour force reports (for July). The stark contrast in the two trends certainly strengthens Canada’s hand in ongoing trade talks with Trump. Canada created 75,000 jobs in July. The U.S. lost 23,000 jobs by one measure (the payroll survey of employers), 87,000 by another (the household survey of workers).
But the longer-term trends also refute Trump’s chaotic economic and geopolitical policies. Since January 2025 (his second inauguration), US employment has declined by 1.0% (by the household survey), the unemployment rate has grown, and the participation rate (which has been much lower than Canada’s for years) has fallen much more.
In Canada, employment rose 1% in the same time, the unemployment rate fell, and the participation rate (which reflects both demographic and cyclical factors) declined 0.4 percentage points (one third as much as in the US). Even in manufacturing, the target for Trump’s tariffs, the US has lost more jobs than Canada since Trump returned to office. This is also true in the high-profile auto sector, which Trump claims should completely relocate to the US: it is losing jobs much faster in the US than in Canada.
Real wages are growing in Canada, but falling in the US. This reflects both strong wage growth here, and slower inflation.
Trump’s policies were never about protecting American workers. They are about weaponizing popular discontent and misdirecting it against foreigners—rather than against the billionaires whose interests he promotes. The longer he’s in power, the weaker the US economy becomes, the worse off are American workers, and the more dismal do his mid-term prospects appear.
Also, the worse the US economy gets, the weaker is Trump’s bargaining position in trade talks (including with Canada and Mexico). With Republicans down badly in the polls as mid-term elections approach, Trump’s tariff war is losing credibility at home quickly.
In short, Trump’s pledge to use “economic force” to annex Canada is backfiring badly. Labour market trends show both that Canada’s economy is more resilient than most expected, but also that Trump’s bargaining position will weaken as more US jobs are lost to his misguided tariffs.
Centre for Future Work Director Jim Stanford discussed the July employment numbers, and the contrast between Canada and the U.S., on CBC News Network with host Lien Yeung.
One nerdy data note: The US releases its payroll and household surveys the same day. The series differ for various reasons, such as self-employment & agriculture (not counted in the payroll data), and multiple job-holding (which inflates payroll employment). US household data has been weaker than payroll data under Trump’s second term, in part because it does count agricultural employment (which has been hurt badly by Trump’s repressive immigration policies).
Canada’s payroll data (from the SEPH series) comes out a few weeks later than the household survey data discussed above, so we can’t make a direct Canada-US comparison for payroll employment in July yet. For May (the most recent Canadian payroll data), Canadian payroll employment was up 0.5% from January 2025, vs a 0.4% increase in the US (both seasonally adjusted). That gap will have widened since May, which will be confirmed when the July data comes out for Canada.