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by voisin 513 days ago
> According to Deepseek, the tariffs could shave as “little” as 1.7% or as much as 8% off of Canada’s GDP, with the baseline estimate around 4%. That’s roughly in line with the Bank of Canada’s projection.

The BoC estimates 6%. I guess it is accurate to say the 1.7% - 8% estimated by Deepseek is “roughly in line”, but it is such a large range as to be pretty useless. Though, if you look at the BoC’s ToTEM model for GDP, it is pretty useless as well, relying on shaky assumptions like a regression to the mean over 6 quarters, which isn’t accurate when it matters most.
3 comments
ahmeneeroe-v2 513 days ago
Anything more precise is likely wrong. A 25% tariff from your largest trading partner (and world superpower) is an extremely impactful event.
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abirch 513 days ago
GDP numbers with decimal points need to be taken with a grain of salt.

The US economy will be hurt as well. Housing costs without Canadian lumber are going to skyrocket, especially with the different natural disasters and home building.

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margorczynski 513 days ago
Aside from the tariff effect itself it could cause a panic and market run ending up in a recession.
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Spooky23 513 days ago
The interesting thing to analyze is the impact of the deal.

The retaliatory tariffs from Canada would be really painful and impactful to the US. The auto industry would implode. The dopey magas in the Midwest would be all laid off in weeks.

Unless we’re going full fascist and rolling tanks, this is positioning for some sort of deal. They cowed Columbia with this stuff, there’s a limited time to play the playbook.

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JumpCrisscross 513 days ago
> shaky assumptions like a regression to the mean over 6 quarters, which isn’t accurate when it matters most

For most second- or third-order effects, this isn’t a bad assumption. When you’re putting a 25% tariff on your largest trading partner into an economic model, you’re already in EVT territory—the central tendency is less relevant than the ranges.

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XorNot 513 days ago
The "is that a big number?" issue basically.

At the scale of a national economy it's just about impossible to comprehend what a small digit % even means (I have some luck reimagining everything as 1 in X, which tends to feel more relatable at least for human centric topics).

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