Trade Dispute with U.S. Continues to Cause Economic Uncertainty in Canada

The Bank of Canada is warning that current economic weakness in the country is more than just a cyclical downturn.

Governor Tiff Macklem says after six months of a trade dispute with our neighbours to the south, the impact of tariffs and continued uncertainty are having an impact.

“U.S. trade conflict has diminished Canada’s economic prospects,” says Macklem. “The structural damage caused by tariffs is reducing the productive capacity of the economy and is adding costs. This limits the ability of monetary policy to boost demand while maintaining low inflation.”

The Bank of Canada lowered its key interest rate by a quarter of a basis point to 2.25 per cent to help boost a weakened economy while keeping inflation below the 2 per cent benchmark.