Impact of U.S. Tariffs on Canadian Economy

U.S. tariffs have created significant uncertainty for the Canadian economy, leading to adjusted growth expectations. Initially, when tariffs were announced, forecasts suggested a potential mild recession in Canada alongside inflation increases due to retaliatory measures. The Bank of Canada responded with rate cuts to stimulate the economy, but uncertainty surrounding trade policy has continued to dampen business investment, resulting in lowered growth projections from 1.9% to 1.7%. Ultimately, the environment shaped by fluctuating tariff threats fosters an unpredictable economic landscape for both the U.S. and Canada, putting downward pressure on the Canadian dollar.