Macklem Warns US Trade Policy Unpredictability Threatens Canadian Growth

Bank of Canada Governor Tiff Macklem warned that the unpredictability of U.S. trade policy could set back recent economic progress in Canada. The Canadian economy grew 3.3% on an annualized basis in the second quarter, but the latest escalation in the trade war with the United States could cause businesses to delay investment and hiring decisions.

The new tariffs imposed by President Trump affect nearly $28 billion worth of Canadian goods, and Macklem said that if they remain in place, the rate of growth for the economy could be roughly halved in the fourth quarter to below one percent.

Macklem also expressed concern about rising oil prices due to the war in the Middle East. He noted that even though the conflict was expected to ease and supply disruptions to normalize, key shipping routes remain disrupted and refineries have been damaged.