MISSISSAUGA, ONT. — Bank of Canada governor Tiff Macklem says the central bank doesn’t have a lot of tools in its toolbox to mitigate the devastating effects tariffs would have on the economy. In prepared remarks for a speech Friday, Macklem said if the U.S. imposes its threatened tariffs and Canada retaliates, Canadian economic growth […]
Bank of Canada Governor Tiff Macklem warned that a trade war between Canada and the U.S. could severely reduce economic growth and increase inflation. He noted the central bank's limited tools to mitigate such impacts, as the effects differ from past crises like the COVID-19 pandemic. Macklem mentioned potential interest rate adjustments to support demand, cautioning against exacerbating inflation. He also highlighted the Canadian dollar's possible further weakening. Macklem emphasized the need for structural changes, such as enhancing productivity and reducing trade barriers, to bolster Canada's resilience against trade-related economic shocks.
