Canada Prepares for Economic Turmoil Amid US Tariff Threats

Prime Minister Justin Trudeau has warned of potential economic turbulence as the U.S. threatens to impose tariffs on Canadian imports, stating Canada is prepared to respond decisively. Michigan Governor Gretchen Whitmer and Ontario Premier Doug Ford have expressed concerns that these tariffs could lead to a trade war, jeopardizing the economies of both regions. The Bank of Canada acknowledges the limitations in countering external shocks like a trade war, with Governor Tiff Macklem indicating that significant tariffs could harm GDP and increase inflation in Canada. Macklem highlighted the uncertainty surrounding the economic impacts of such tariffs, as historical precedents for changes of this magnitude are limited. The federal bank recently lowered its key interest rate in anticipation of the economic fallout. Overall, both Canadian officials and economic experts emphasize the serious implications of a prolonged trade conflict with the U.S.