This article was written on July 11, 2025, by which point Donald Trump had already announced a 35% tariff on all goods imported from Canada starting August 1, 2025. The effect on housing was already visible: even though interest rates were much lower than the year before, the Canadian market had barely moved, and the tariff fight was the main reason.
I am Moe Asgarian, a senior real estate broker in Toronto ranked 47th in RE/MAX worldwide. This story moves fast, so read what follows as a record of where things stood in mid July 2025: the tariff news, Canada's response, and what forecasters expected for prices in Toronto and Vancouver.
What Trump Threatened in July 2025
So much happened in different parts of the world and in Canada and then passed, but this tariff fight between Canada and the United States is still with us. Trump announced that from August 1, 2025, he wants to apply a 35% tariff on all goods imported from Canada. In the letter he sent to Canada's prime minister, Mark Carney, he wrote that if Canada or Canadian companies decide to produce their goods inside the United States, there is no tariff. In other words, close your factories and move them to the United States so you do not have to pay a tariff to the United States. He also warned that if Canada retaliates, he will push the tariffs even higher than before. The deadline for an agreement between Canada and the United States in this tariff war had already been set for July 21.
The Trade Agreement Carve Out and the Copper Tariff
One day after Trump's threat, an official of the United States administration told CBC that this tariff does not include goods that fall under the United States, Canada and Mexico free trade agreement, and that for now it applies only to those goods that currently carry a 25% tariff. So a limit was placed on it. Beyond that tariff, though, Trump threatened in July 2025 to apply a 50% tariff on copper imported from Canada. In 2023 Canada exported about $9.3 billion of copper and copper products, most of it, around 52%, to the United States. We had already seen the United States put tariffs on Canadian made steel, aluminium and cars, which caused economic loss for Canada and the disappearance of many jobs.
Canada's Response and the Digital Services Tax
Negotiations were still going on as of mid July 2025, and Canada did respond. Carney said Canada is committed to defending Canadian workers and businesses. He said Canada will stay at the negotiating table while also strengthening its trade relationships with other countries. On the other side, just before it was due to take effect, Canada's Liberal government decided to cancel the digital services tax, the tax Trump had demanded be removed, having said that if it was not removed he would cut off trade talks with Canada. With it cancelled, there may be some hope that the talks continue.
Why the Tariff War Was Holding Canadian Housing Back
It is obvious that the effect of this on the Canadian housing market is large and heavy. Even though interest rates had come down a long way compared with the previous year, as of July 2025 the market had not changed much, and the main reason is this tariff war. The figures show average prices across Canada about 3% lower over the course of 2025 to that point. The Bank of Canada, by cutting rates quickly, has prevented a deeper fall. The June 2025 numbers do show that sales in the previous month rose a little, especially among first-time buyers.
What the Reuters Poll Forecast for Toronto and Vancouver
Reuters ran a poll in Canada, reported in July 2025, showing that home prices in Canada will probably fall about 2% in 2025, and that 2026 will not bring any unusual growth either. In the first three months of 2025 the forecasts were all positive, but because of the trade war and the fear of a recession the outlook for the market has darkened. In that newer July 2025 poll, the forecast was that for 2025 the average home price in Toronto could fall by around 4% and in Vancouver by around 2%. Even so, the expectation was that by late 2025 the market would gradually improve, on the condition that the trade war does not escalate and that the Bank of Canada cuts the policy rate again.
Your Own Street Is Not the National Average
There is one thing you do have to pay attention to. Whatever you are putting up for sale, an apartment or a house, the area it sits in and the particular market it belongs to may behave differently. The price may not come down at all, it may come down more, or there have been areas where prices went a little higher than in previous months. So that specific market has to be watched and studied carefully, and that is what I do before I price anything in Toronto or the GTA.
If you want that read on your own property or on the area you are buying in, fill out the form at the bottom of this page or book a free consultation. Stay well and take care.
Frequently asked questions
What tariff did Trump threaten against Canada in July 2025?
In July 2025 Trump announced that from August 1, 2025 he intended to apply a 35% tariff on all goods imported from Canada, and separately, in the same month, he threatened a 50% tariff on copper imported from Canada. A day after the announcement, a United States administration official told CBC that the 35% tariff would exclude goods covered by the United States, Canada and Mexico free trade agreement and would apply for now only to goods already carrying a 25% tariff.
Why had Canadian home prices not responded to lower interest rates by July 2025?
Interest rates had come down a long way from the previous year, but as of July 2025 the market had barely moved, and the main reason was the tariff war with the United States. Figures at that point showed average Canadian prices about 3% lower over 2025, with the Bank of Canada's rapid rate cuts credited with preventing a deeper fall. June 2025 sales did rise a little, especially among first-time buyers.
What was forecast for Toronto home prices in 2025?
A Reuters poll conducted in Canada and reported in July 2025 forecast that the average home price in Toronto could fall by around 4% in 2025 and in Vancouver by around 2% that year, with Canadian prices down about 2% in 2025 and no unusual growth in 2026. The poll expected gradual improvement by late 2025 if the trade war did not escalate and the Bank of Canada cut its rate again.