Bank of Canada Sees Tariff Dispute as Threat to Business Confidence

The Bank of Canada's governing council is concerned that a renewed trade dispute between Canada and the US could negatively impact business and consumer confidence.

The central bank released a summary of its deliberations ahead of its interest rate decision on September 2, where it decided to keep the key policy rate steady at 2.25 per cent.

Fears about the tariff dispute were exacerbated by the US imposing sharp tariffs on Canadian goods on August 22, prompting retaliatory actions from Canada in the weeks following the bank's rate decision.

The Bank of Canada's policymakers believe that these new tariffs will hit targeted sectors hard but have a modest overall impact on the economy.