Trade War Risks: NZ Households Face Income Decline Amid Trump Tariffs

The Bank of Canada has warned that a prolonged trade conflict with the U.S. could lead to a permanent decline in domestic GDP, as highlighted in the minutes from a recent policy meeting. The Bank's decision to reduce its key policy rate to 3% was influenced by the risks posed by U.S. tariffs, which could disrupt economic activity and increase inflation in Canada. Meanwhile, New Zealand's Trade Minister discussed the limited impact of U.S. tariffs on his country's exports, estimating an additional $5 million in tariffs amid broader concerns about Trump's trade policies affecting global markets. Former New Zealand Trade Minister Tim Groser cautioned that New Zealand should not assume it is immune from potential tariffs as U.S. agricultural protectionists gain confidence under Trump's administration. Groser emphasized that even smaller countries like New Zealand might be targeted as U.S. officials become more sympathetic to their domestic producers. Overall, the escalating tariff threats continue to create uncertainty for nations reliant on trade with the U.S.