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Bank of Canada Freezes Rates as Trump’s Tariff Threat Looms Over Economy

Bank of Canada Holds Rates Steady Amid Tariff Turmoil In a widely anticipated move, the Bank of Canada has opted to maintain its benchmark interest rate at 2.75% for the third consecutive time, as trade tensions with the United States intensify ahead of an August 1 tariff deadline. Economists had unanimously predicted the hold, citing mixed economic signals: while employment remains strong, core inflation continues to hover above the Bank’s target. Governor Tiff Macklem emphasized that monetary policy cannot offset the impact of prolonged trade conflicts, reiterating the Bank’s commitment to price stability for Canadians. The decision comes as President Trump threatens sweeping tariffs on Canadian goods, including a potential 35% blanket rate and sector-specific levies on steel, aluminum, and autos. These measures have injected uncertainty into business planning and consumer confidence, with many firms scaling back hiring and investment. Despite the hold, analysts warn that further...
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Canada Strikes Back: New Steel Import Limits Aim to Shield Domestic Industry

In a bold move to counter the economic strain caused by steep U.S. tariffs, Prime Minister Mark Carney announced new measures to protect Canada’s steel industry. The federal government will impose tariff rate quotas on foreign steel imports, particularly from countries without a free trade agreement with Canada, capping them at 2024 levels.

This decision comes in response to U.S. President Donald Trump’s recent hike in steel and aluminum tariffs—from 25% to a punishing 50%—which has led to a sharp decline in Canadian exports and mounting job losses. Carney emphasized that the new quotas are designed to make Canadian steel more competitive and prevent market destabilization caused by global overcapacity and unfair trade practices.

If ongoing trade negotiations with the U.S. fail to yield results by July 21, Canada is prepared to escalate its counter-tariffs on American steel and aluminum products. Additional measures include restricting federal procurement to Canadian and trusted trade partners, and launching task forces to monitor the steel and aluminum sectors.

Carney summed up the urgency: “We must reinforce our strength at home and safeguard Canadian workers and businesses from the unjust U.S. tariffs that exist at present”. The government’s swift action signals a firm stance in defending national industry amid turbulent trade relations.

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