Economists say Canada recession has already begun as trade war rages on

Canada’s economy is likely in the early stages of a recession, according to forecasters, as unemployment rises and exports fall because of a trade war with the US.

Economists surveyed by Bloomberg say output will shrink 1% on an annualized basis in the second quarter and 0.1% in the third quarter, a technical recession.

Exports are tumbling — they will drop 7.4% on an annualized basis in the current quarter, forecasters estimate, after President Trump’s tariff threats caused U.S. importers to pull forward their shipments earlier in the year.

But exporters should be able to stage a modest recovery, starting later in the year.

The trade dispute with Canada’s closest trading partner is hitting the labor market and household consumption.

Economists now say unemployment will rise to 7.2% i