US Unemployment Rate Compared to Canada as Trump Trade War May Impact Both

President Donald Trump has recently criticized Canada’s unemployment rate while praising the U.S. rate, prompting questions about how the two countries compare as the trade war escalates.

Trump's comments targeting Canada's unemployment rate are among the most recent developments in the escalating trade war between the two countries since Trump first imposed tariffs against Canada in March 2025. While Trump has recently criticized Canada's unemployment rate, he has praised the U.S. unemployment rate as the economy remains a top concern for voters less than 40 days out from the midterm elections.

"Canada was offered the most generous trade deal of any of America’s trading partners despite being overwhelmingly reliant on access to the American economy, which is over 12-times larger than Canada’s economy," White House spokesman Kush Desai told Newsweek on Monday. "Canada rejected that deal to demand continued one-sided access to the American market with no reciprocity. President Trump was given a resounding Election Day mandate to put American workers, farmers, and businesses first, and the Administration will continue to deliver while lowering costs for everyday families.”

Last week, Trump wrote on Truth Social that Canada had "big unemployment," and said immigration was contributing to the unemployment numbers. In August, he claimed Canada’s unemployment rate was “10% and rapidly rising."

Canada’s statistics, however, tell a different story.

Yes. The U.S. unemployment rate for this past August was 4.1 percent, compared to Canada's 6.4 percent rate. However, Trump's claim that Canada's unemployment rate had hit 10 percent is false.

According to data from StatCan, the Canadian government's national statistical agency, the last time Canada had hit a 10 percent unemployment rate or greater was in August 2020. At that same time period, the U.S. unemployment rate was 8.4 percent.

While its unemployment rate is worse than the U.S. at 6.4 percent to 4.1 percent respectively, Canada’s unemployment numbers have improved more than the U.S. has since this time last year.

"One thing that is absolutely true is that the United States has a very low unemployment rate right now," University of Toronto economics professor Peter Morrow told Newsweek. "By that measure, the United States economy is actually quite strong, and the labor market is quite good."

Morrow added that the U.S. economy has been stronger than Canada's for some time.

Tariffs and trade wars can affect unemployment rates.

As the imported goods become more expensive to buy, exporters might face lower sales, which could lead to layoffs. The U.S. is Canada’s largest trade partner, and some of the industries most vulnerable to impacts from tariffs include the auto industry and steel and aluminum.

However, the Canadian unemployment rate has improved from 6.8 percent in March 2025, when Trump first imposed the tariffs, to 6.4 percent in August 2026. The same is true for the U.S., which saw an improvement in its unemployment rate of 4.2 percent in March 2025 to its current rate of 4.1 percent.

And although trade war impacts haven't hit the unemployment rates, Canada "is much more susceptible to trade disruptions than the United States," Morrow said, and has more to lose than the U.S. in terms of labor markets.

While Morrow stressed that it is definitely possible the trade war could worsen unemployment in Canada in the future, the big impact so far has actually been hiring trends. While Canadian companies may not be laying off staff, they aren't hiring new staff either.

"Businesses up here really don't know what's going to be happening over the next couple years, so they are really hesitant to hire people and invest in new projects," Morrow said. "It's not the tariffs as much as uncertainty around the evolution of tariffs."

While Trump has said the tariffs could bring factory jobs back to the U.S., the U.S. labor market could also be impacted by the ongoing trade war. Retaliatory tariffs from Canada could affect U.S. industries exporting goods to Canada, lowering demand and potentially slowing hiring or leading to layoffs. U.S. companies could also face higher costs from using Canadian materials or energy, which could contribute to scaled back expansion plans or less hiring.

The most recent unemployment data from the U.S. Bureau of Labor Statistics shows that Washington, D.C., has the worst unemployment in the U.S. at 5.7 percent, followed by California, Connecticut and Oregon at 5.1 percent, Michigan at 5 percent, and Arizona and Washington state at 4.9 percent.

Meanwhile, South Dakota has the best rate at only 2 percent, followed by North Dakota at 2.2 percent, Vermont at 2.6 percent, New Hampshire at 2.8 percent and Nebraska at 2.9 percent.

Despite the low unemployment rate in the U.S., American workers' confidence remains low when it comes to their employer's future prospects, according to Glassdoor's latest Employee Confidence Index. The U.S. has not been immune to layoffs, and hiring has been slow for many white-collar fields.

According to Glassdoor, employee confidence, which measures the share of workers who report a positive six-month business outlook for their employer, fell to 42.9 percent from 44.5 percent in the September report.

“The White House can describe the economy as booming, but workers judge the economy from inside their own company. Are we hiring? Are people getting laid off? Are costs rising? Does my job feel more or less secure than it did a year ago?” Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, previously told Newsweek.

It remains to be seen how either the U.S. or the Canadian job market will respond, if at all, to the ongoing trade war, but economists will be watching ongoing employment reports from both sides of the border as the prolonged trade war continues. Given the continued tension between the two countries, the trade war is unlikely to let up anytime soon. As the U.S. midterm elections grow closer, the U.S. economy is likely to remain a top issue for voters regardless of how unemployment rates shape up in the days before the election.

Newsweek’s reporters and editors used Martyn, our AI assistant, to produce this story. Learn more about Martyn here.