Canada's ambassador to the U.S. warned Wednesday that President Donald Trump's tariffs are driving up investment costs and discouraging business expansion, as new Federal Reserve research points to more price hikes for American consumers next year.
"Uncertainty increases your cost of capital," Ambassador Mark Wiseman said at the B20 summit , a gathering of global business leaders in Washington hosted by the U.S. Chamber of Commerce.
"If you're going to build a new plant, add a new ship, spend money on R&D, the more certainty you have, the more likely you're going to do that," said Wiseman, a former BlackRock executive who became Canada's ambassador in February.
His warning comes as Washington and Ottawa struggle to resolve a tariff quarrel affecting one of the U.S.'s largest trading relationships. The two countries exchanged roughly $570 billion in goods during the first nine months of 2026, according to U.S. Census Bureau data . That's an increase from the same period in 2025, the first year of Trump's second term, but lower than the comparable nine months during the previous three years, when Joe Biden was president.
U.S. customs duties calculated on imports from Canada reached $10 billion in 2025, compared with $400 million in 2024, according to the Congressional Research Service .
An October study by New York Fed researchers found that nearly 90% of tariff costs were passed on to U.S. importers, with about a quarter of tariff increases eventually reaching consumer goods prices and further price pressures expected in 2027.
The findings come as Labor Department data showed consumer prices rose a higher-than-expected 0.4% in October, adding to inflation concerns after Republicans' sweeping midterm losses .
Trump has defended his tariffs as necessary to protect U.S. manufacturers and workers, accusing Canada of discriminatory trade practices that disadvantage U.S. exporters.
The two governments have resumed negotiations after talks collapsed in August, with discussions focused on reducing tariffs on Canadian steel and automobiles. Trump has imposed duties of up to 50% on certain Canadian products , prompting retaliatory measures targeting billions of dollars in U.S. exports.
Wiseman called for the removal of tariffs imposed under Sections 232 and 338 of U.S. trade law, saying a resolution would help businesses make long-term investment decisions.
The political stakes have shifted following the midterms, with Democrats preparing to challenge Trump's tariffs when they take control of Congress in January.
Still, Canadian Prime Minister Mark Carney said Tuesday that the Trump administration remains Canada's principal negotiating partner.
"We've had comprehensive free trade with the United States since 1988," Wiseman said, describing Canada's objective as returning "as close as we can to free trade" while creating the certainty businesses need.
European ambassadors echoed those concerns at the B20 summit. Germany's ambassador to the U.S., Jens Hanefeld, said businesses could adapt to tariffs but struggled with an "ever-changing regulatory environment" that forced companies to spend more on lawyers to navigate shifting trade rules.
Speaking on the same panel, France's ambassador, Aurélien Lechevallier, urged greater cooperation on AI and energy rather than continued trade disputes.
"We've spent, I think, a lot of time the last years working and dealing with regulations, tariffs," he said. "Businesses are eager to do more business."
