Kashkari Warns Prolonged Trade Tensions with Canada Could Extend Inflation

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, warned that the ongoing trade tensions between the US and Canada could prolong elevated inflation. Speaking on Face the Nation with Margaret Brennan, Kashkari noted that the longer these trade disputes continue, the more likely it is for inflation to be extended.

The US began imposing 50% tariffs on Canadian products last Saturday after negotiators failed to reach an agreement. Canadian Prime Minister Mark Carney has promised retaliatory tariffs targeting steel, dairy, appliances, agricultural equipment, pulp, paper, and electronics, set to take effect on September 8th.

Kashkari emphasized that Canada is a crucial trading partner for the US, with bilateral trade valued at $880 billion in 2025. He attributed current inflation to supply shocks, including trade and tariff conflicts, as well as the ongoing conflict with Iran, which he said has had a broad impact on energy prices.