US Trade Uncertainty Threatens Canadian Economic Growth

Bank of Canada governor Tiff Macklem has sounded the alarm on the impact of U.S. trade policy unpredictability on Canada's economy. In a speech in Halifax, Macklem noted that the changing trade picture is causing businesses to delay investment and hiring decisions.

The uncertainty surrounding U.S. tariffs could lead to a significant slowdown in economic growth. According to Macklem, if new U.S. tariffs remain in place, the rate of growth for the economy could be roughly halved in the fourth quarter to below 1%.

The trade challenges come at a time when oil prices are pushing higher due to the war in the Middle East. If oil prices stay near US$100 per barrel, Macklem says the central bank would expect inflation to edge up in the coming months.