At first glance, it might seem strange to connect international tariffs and trade wars to a divorce proceeding here in Ontario. After all, one involves global economic policies, the other, very personal life decisions. But as a family lawyer who sees the complexities of divorce daily, I can assure you that global economics and local family law are more intertwined than you might think.
Whether it’s tariffs imposed on steel, automotive parts, or agricultural products, global trade conflicts directly influence our local economy, housing prices, interest rates, and employment stability. In turn, this economic uncertainty can significantly affect divorcing couples here in Ontario—especially when it comes to dividing assets, valuing property, and establishing spousal and child support.
Let’s explore why this matters to you, how tariffs and trade wars may affect your divorce, and what you can do to navigate the uncertainties they bring.
How Tariffs and Trade Wars Influence Divorce
1. Property Values and Asset Division
When trade tensions rise between countries (such as those we’ve seen recently between Canada, the U.S., and China), Ontario’s economy can feel the strain. Key industries—automotive manufacturing, steel production, agriculture—can see significant swings in profitability, employment, and stability. This, in turn, influences home prices, investments, and business valuations.
If you’re going through a divorce, fluctuating property and investment values add complexity when determining equalization payments. What was considered a stable investment yesterday might carry far more risk today. Similarly, family-owned businesses tied directly or indirectly to global trade can see dramatic changes in valuation in just months or even weeks.
Actionable advice: Regularly update your asset valuations, particularly if you’re mid-negotiation or considering mediation or litigation. Stay aware of industry-specific news that could impact your holdings.
2. Employment Stability and Support Payments
Tariffs don’t just impact business owners—they also affect employment stability for workers across industries. As Ontario companies navigate economic uncertainty, layoffs, reduced hours, or shifts in employment terms can become a reality for many families.
In family law, spousal and child support are directly tied to income stability. If your employment or your spouse’s job is threatened by trade disputes, accurately projecting support payments becomes challenging.
Actionable advice: Be proactive. Openly discuss potential changes in employment with your lawyer, and ensure support arrangements consider possible economic shifts. You might consider contingency clauses or periodic reviews within your settlement to account for employment fluctuations.
3. Interest Rates and Debt Management
Trade wars can prompt central banks to adjust interest rates. For families going through separation, this has real consequences: mortgage refinancing, debt consolidation, and maintaining a family home suddenly become more expensive or uncertain.
Higher interest rates could alter your ability or willingness to buy out your spouse’s share of a home, affecting your overall divorce strategy.
Actionable advice: Stay informed about economic forecasts and interest rate trends. Consider locking in mortgage rates early if refinancing is part of your separation agreement. Seek professional financial advice in addition to your legal counsel.
Mitigating the Impact of Economic Uncertainty
Divorces can feel chaotic even without international economic turbulence. Here are three practical steps Ontario couples can take to manage additional uncertainty:
1. Flexibility in Agreements
Create divorce and separation agreements that explicitly acknowledge economic uncertainty. Clauses for review or mediation based on significant economic changes can help avoid future conflict.
2. Regular Financial Updates
If your divorce involves complex assets, periodic valuation updates during your separation process can ensure fairness and reduce disputes. Monthly or quarterly updates can make a considerable difference in volatile economic times.
3. Collaborative Approaches
Consider collaborative divorce, mediation, or other dispute resolution methods that allow you to jointly manage financial risks and uncertainties rather than leaving these decisions in the hands of a judge who may not fully appreciate your economic circumstances.
Navigating the Storm Together
Just as tariffs and trade wars require flexibility, negotiation, and strategy from governments and businesses, your divorce settlement demands a similarly thoughtful approach. Awareness of the economic climate, regular dialogue with your lawyer and financial advisor, and proactively addressing uncertainties will help Ontario couples navigate this challenging period with greater stability.
While you may not control global economic policy, you can control your approach to its impacts on your family. Facing uncertainty head-on can protect your finances, your future, and most importantly, your peace of mind.
