Canada would still benefit from some of the lowest tariff rates charged by the U.S. even if the Trump administration imposes new levies on a swath of products, according to an analysis from the National Bank of Canada.

A report released from the bank on Tuesday found the Trump administration’s threatened 50 per cent tariffs would drive up Canada’s average rate from around 5 per cent to only roughly 7.5 per cent. 

That rate falls further when making estimates based on the latest trade data. Using the May numbers as a benchmark, the bank found the current duty rate actually paid on Canadian goods will rise from around 3 per cent to just over 5, as producers of heavily tariffed goods will likely seek out alternative markets.

This would push Canada from having one of the lowest collective tariff rates to landing just inside the top 10, though still under the 6.9 per cent global average rate.

Ethan Currie, a co-author of the report and an associate with National Bank, said while the proposed tariffs are “pretty jarring” for impacted producers, they only represent around 5 per cent of U.S. imports from Canada.

“Even in the worst case scenario, where that average tariff rate shifts up by two [or] two and a half percent, Canada is still looking decent on the global scale,” he said in an interview on Wednesday.

“They don’t have maybe as big of an advantage anymore, and it would obviously create quite a bit of damage in those certain sectors. But overall, our tariff rate would remain somewhat favourable.”

U.S. President Donald Trump announced the latest slate of tariffs on Monday, a steep escalation of the American-initiated trade war that had largely remained static since last fall.

These new levies — invoked under Section 338 of the Tariff Act of 1930, otherwise known as the Smoot-Hawley Act — are set to come into force in 30 days on a wide array of goods, ranging from hockey sticks to wine to cement. Unlike previous tariffs, these will apply to even goods that qualify as compliant under the Canada-United States-Mexico Agreement, better known by its acronym, CUSMA.

U.S. Trade Representative Jamieson Greer said the measure is a response to provincial bans on U.S. liquor, Canada’s supply managed dairy system and quotas on certain U.S. vehicles.

The new tariffs will not apply to industries already facing sectoral specific duties like steel and aluminium producers.

A Canadian government source said these new tariffs will be “felt more acutely in certain sectors and regions of the country,” but will have a limited impact on the country’s effective tariff rate.

The source, who isn’t being identified to comment publicly on internal matters, said the government is meeting with industries to discuss new measures to support them in the wake of this latest salvo from the U.S., though existing supports like the large enterprise tariff loan were “inclusively designed to provide blanket support on a needs basis to companies or sectors in need.”

The source added that it’s expected that Trump will impose new tariffs on other countries by the end of the month.

This is in reference to the 10 per cent “surcharge” tariffs imposed by Trump under s. 122 of the Trade Act in February. Those were imposed after the Supreme Court struck down his imposition of tariffs under the International Emergency Economic Powers Act and will expire at the end of July.

CUSMA compliant goods were exempted from these tariffs.

Americans may also be using the tariffs to restart talks. Greer suggested they were introduced because Canada had refused to address long-standing irritants identified by the White House.

In the wake of Trump’s announcement, Prime Minister Mark Carney said Tuesday that Canada will intensify trade talks with the U.S.