Canada's central bank cut its key lending rate on Wednesday, offering a boost to borrowers in an economy squeezed by US President Donald Trump's trade war.

The Bank of Canada reduced the rate to 2.5 percent, after holding it at 2.75 percent since March as it weighed the impact of Trump's fluctuating tariffs on Canadian businesses heavily dependent on exports to the United States.

But the bank said there was now clear evidence Trump's protectionism was inflicting damage on key, targeted sectors -- notably autos, steel and aluminum, which have all suffered job losses.

"Tariffs are weakening the Canadian economy. You can see that very clearly in the directly affected sectors," central bank Governor Tiff Macklem told reporters after the announcement.

The bank noted Canada's GDP declined ro

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