Canada's Growth Rebound at Risk as US Tariffs Escalate

Canada's economy is expected to rebound in Q2, driven by domestic demand and exports. According to Elias Haddad of Brown Brothers Harriman (BBH), real GDP will rise 3.4% SAAR compared to a decline of 0.1% in Q1.

This growth projection exceeds the Bank of Canada's (BoC) estimate of 2.5%. However, the escalating US-Canada trade war poses a significant risk to this recovery.

The breakdown in trade talks between the two countries led to a fresh round of tariffs, with 50% duties now applied to approximately $20 billion worth of imports from Canada, equivalent to about 0.85% of the country's GDP.