New US Tariffs Could Cut Canada's Q4 Growth Below 1%
Bank of Canada Governor Tiff Macklem warned that new US tariffs could slash Canada's fourth quarter growth to below 1%, amid a fresh wave of uncertainty. The tariffs, which were unveiled after a prospective trade deal between the two long-term allies collapsed, threaten to hit investment and hiring.
Macklem said that while slower growth might drag inflation downwards, the Middle East conflict could push it up as oil prices soar. Canada's annual inflation rate is 3%, well above the bank's 2% target, and could edge up if oil prices remain near $100 a barrel.
The Canadian economy rebounded in the second quarter, with annualized growth of 3.3%. However, businesses may delay investment and hiring decisions due to the new tariffs, which could halve growth in the fourth quarter.