Bank of Canada warns US tariffs could halve Q4 growth
Governor Tiff Macklem says new trade barriers and Middle East conflict threaten to slash fourth-quarter economic expansion below 1%.
What to know
- New US tariffs could slash Canada's Q4 growth to below 1%, cutting the prior forecast roughly in half as businesses delay investment and hiring.
- The Bank of Canada faces conflicting pressures: slower growth could ease inflation, but Middle East conflict and $100+ oil prices could push prices higher.
- Canada's inflation rate stands at 3%, well above the central bank's 2% target, complicating monetary policy decisions.
- Businesses have been adapting supply chains and sourcing strategies during the 18-month trade war, though productivity gains from AI adoption remain uncertain.
Economic constraints reflect structural power imbalances favoring ownership interests over broader welfare.
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“It's only that way because that's what the ownership class demands, it doesn't have to be that way”
BlademasterFlash · Reddit ↗
“The latest escalation could once again cause businesses to delay investment and hiring decision.”
Tiff Macklem, Bank of Canada Governor · Investing.com News ↗ · Sep 20
Tiff Macklem Bank of Canada GovernorBank of Canada Central bank
How it unfolded 1 development · click the chart to see its coverage articlespostscomments
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Businesses adapting supply chains but AI productivity gains uncertain
Since the start of the US-Canada trade war, Macklem noted evidence that businesses are reducing tariff exposure through supply chain changes and sourcing strategy shifts, and adopting AI technology, though productivity impacts will take time to show.
“If these new tariffs remain in place, growth could be roughly halved in the fourth quarter, to below 1%.”
— Tiff Macklem, Bank of Canada Governor · source -
first by Investing.com News, 2d ago · also Financial Post
2 more headlines
- Bank of Canada says new US tariffs could slash fourth quarter growth Investing.com News · 2d ago
- Bank of Canada governor warns new tariffs could cut fourth-quarter growth in half Financial Post · 2d ago
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It’s only that way because that’s what the ownership class demands, it doesn’t have to be that way
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Canada's inflation at 3%, well above 2% target — Canada's annual inflation rate stands at 3%, above the Bank of Canada's 2% target, and could rise further if oil prices remain elevated.
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Macklem flags competing inflation pressures from oil prices and slower growth — Macklem noted that the central bank faces conflicting pressures: slower growth could push inflation downward, but the Middle East conflict and crude oil prices near $100 per barrel could drive inflation higher, with no evidence yet that elevated fuel costs are spreading to other goods.
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Macklem warns tariffs could cut Q4 growth below 1% — Bank of Canada Governor Tiff Macklem said in a Monday speech that new US tariffs could reduce Canada's fourth-quarter growth to below 1%, roughly halving prior forecasts, as businesses delay investment and hiring decisions in response to trade escalation.