The farm lender maintained its prediction that GDP growth would slow to around one per cent.

The effective blockade of the Strait of Hormuz, which has restricted the flow of oil and gas from the region, has pushed commodity prices to multi-year highs, FCC economist Krishen Rangasamy wrote in a March 18 report.

Pros and cons

The jump in prices could spell opportunity for Canada, Rangasamy said.

WHY IT MATTERS: Higher fuel and fertilizer prices for farmers today could be followed by higher borrowing costs in the future if core inflation persists.

“Given its high historical correlation with commodity prices, nominal GDP (which matters for government revenues) is likely to also perk up.”

If commodity prices stay high, the federal government and governments in resource-rich provinces such as Alberta or Newfoundland and Labrador could see higher revenues. That doesn’t mean governments will spend more, Rangasamy said, but there’s potential for a spending-related GDP boost.

However, fertilizer prices are among those surging due to the conflict which is weighing on the ag sector. Higher prices for fuel can also push up inflation and erode consumers’ buying power.

Trade war damages

Last year, Canada’s economy saw the worst performance since the 2020 pandemic recession — growing just 1.7 per cent, Rangasamy wrote. Export volumes fell on an annual basis for the first time in five years.

Government and consumption spending offset weaknesses in housing and business investment. However, based on a slumping household savings rate, consumers also dipped into savings to maintain lifestyles. This means Canadians have little cushion to absorb future shocks.

“With no end in sight to America’s trade war … look for trade and business investment to act as a drag on Canada’s economy again in 2026,” Rangasamy said.

Government and consumption spending may not provide as much of an offset this time. Rangasamy noted the government has telegraphed caution related to public spending. While ambitious public projects are in the works, that spending isn’t expected this year.

Interest rates and the loonie

If commodity prices stay high long enough, businesses may be forced to raise prices which could lead workers to demand higher wages.

“That could potentially trigger a wage-price spiral,” said Rangasamy.

The Bank of Canada could pre-emptively raise interest rates to prevent core inflation from taking off. However, he predicted the bank would stay in “pause mode” for several months.

FCC predicted the Canadian dollar would trade in the 72- to 74-U.S. cent range for most of the year, but acknowledged currency volatility could temporarily take it outside that range.

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The bank, which has kept its rate at 2.25 per cent since last October, said the Middle East conflict would drive up gasoline prices and boost inflation in the short term.

“It is too early to assess the impact of the war on growth in Canada,” Macklem told reporters, saying the risk of higher energy prices quickly spreading to the prices of other goods and services looked contained for the moment.

“Governing Council will look through the war’s immediate impact on inflation but if energy prices stay high, we will not let their effects broaden and become persistent inflation,” he told reporters.

Before the war started, the inflation rate in Canada had hovered around the central bank’s two per cent target for several months with the bank’s monetary policy stance seen as moderately stimulating a weak economy.

Iran war likely to affect forecasts

Economists say high energy prices are likely to affect forecasts for inflation and growth if the Strait of Hormuz, responsible for a fifth of global oil trade, stays closed beyond a few weeks.

Money markets, which had been expecting the bank to sit on the sidelines in 2026, firmed their bets for a rate hike in December.

The Canadian dollar weakened after the rates announcement and was trading down 0.20 per cent to C$1.3717 or 72.90 U.S. cents.

“Economic weakness combined with rising inflation is a dilemma for central banks,” said Macklem.

“Raising interest rates to slow inflation could further weaken the economy. Easing interest rates to support growth risks pushing inflation well above target.”

Macklem said near-term Canadian growth was likely to be weaker than the bank had forecast in January and described uncertainty as acute.

Canada is also dealing with U.S. tariffs on some critical sectors, subdued business investment, a soft labor market and a lack of clarity on the future of a free trade deal between the U.S., Mexico and Canada.

“Canada’s economy is dealing with a lot, and now we face more volatility,” he said.

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That’s according to Farm Credit Canada chief economist Desmond Sobool during FCC’s most recent economic outlook on Jan 22.

FCC expects farmers will see another jump in their bills this year. Its farm cost projections expect overall expenses to rise four per cent in 2026 over the previous year.

“If you look back to 2019, which is kind of our base pre-pandemic year, overall farm expenses are up over 50 per cent since 2019,” Sobool said. “In comparison, inflation in Canada overall is up 20 per cent, so you can just see how much more significant the impact of inflation has been on farm expenses.”

WHY IT MATTERS: Canada’s economy, agriculture included, is till trying to navigate volatile seas when it comes to trade and geopolitics, affecting projected farmer profit margins, investment and growth prospects in the agriculture sector and more. However, Canadian cattle prices will continue a run of strong, stable prices.

Sobool’s most energizing message concerned Canada’s new agreement-in-principle with China, which promised to drop Chinese tariffs on Canadian canola seed from 76 per cent to 15 per cent by March and eliminate China’s tariff on Canadian canola meal (at least for 2026) and peas — a boon for the domestic canola crushing sector.

“(Producers) have some certainty that there will be market access for canola this year,” he said.

That was before U.S. President Donald Trump threatened 100 per cent tariffs on Canadian goods if Canada makes a trade pact with China. The U.S. is Canada’s biggest canola customer, worth about $7.7 billion of oil, meal and seed exports.

Cattle wave still rolling

Sobool reported Canadian cow-calf producers and feedlots are set for another year of strong prices, driven in part by moderating feed costs.

Canadian cattle growers are finally seeing signals for expansion of the national herd, which steadily dropped over the drought years of the early 2020s.

The U.S., meanwhile, has its own challenges on herd retention. Heifer retention rates remain at a 75-year low, Sobool said.

Sobool also looked at the number of cows and heifers being sent to slaughter as a percentage of total animals to determine cattle herd trends. Once that percentage dips below 40 per cent, it’s a signal that the cattle herd is expanding. Canada’s percentage is currently at 41 per cent.

“In the U.S. it’s still about 49 per cent through 2025, so in the U.S., we’re still not seeing those market signals and so that’s going to continue to support prices.”

GDP slowdown

Canada’s economy is still growing, but FCC expects that growth to be slow.

The lender is forecasting Canada’s economic growth will slow from 1.7 per cent in 2025 to 1.2 per cent in 2026.

“I understand that what we’re saying here is quite different from consensus on interest rates, because most forecasters are predicting either no change to the overnight rate or even an increase later this year,” said Krishen Rangasamy, principal economist with FCC.

“That may well be the right forecast if the economy picks up materially. But … we think economic growth will weaken this year and if we’re correct about that additional stimulus by the central bank should not be ruled out.”

Uncertainty over the future of the soon-to-be-reviewed Canada-United States-Mexico Agreement (CUSMA) will continue to be a limiting factor, Rangasamy said.

He suspects Canadian exporters in CUSMA’s tariff-free categories such as farm, fishing and intermediate food products have felt above-expected tariff impacts due to confusion over rules of origin requirements, losing their CUSMA compliance in the process.

“Remember that the majority of our exports to the U.S. is tariff-free thanks to CUSMA, and yet, outside of the energy sector, our exporters have really struggled since the U.S. tariffs were imposed,” he noted.

Tariffs placed on Canadian goods have caused U.S. importers to look elsewhere. This has caused Canada’s share of the U.S. market to drop to 11 per cent — its lowest ever — in 2025.

Diversified trade

Although Rangasamy considers Canada’s attempts to diversify trade partners commendable, he was disappointed in the country’s apparent inability to “materially reduce” dependence on the U.S., in light of its 15 free trade agreements with 51 countries.

“We’re not capitalizing on opportunities presented by those trade deals,” he said, citing ignored opportunities presented by the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).

That agreement was designed to offer Canadian businesses preferential access to the EU market. But some expected big winners when the deal was first inked have failed to see major gains, particularly meat sectors who say regulation conflicts continue to keep them out.

Leveraging the house

This year will also see a large share of Canadian households renewing mortgages at higher interest rates than their origination. According to Bank of Canada estimates, mortgage payments will increase by an average six per cent this year.

“Those households that are renewing their fixed-year, five-year mortgage — which, by the way, is the most popular mortgage product in the country. For those folks, payments will increase by about 20 per cent,” listeners heard.

If there’s a bright spot for Canada, Rangasamy said it’s the federal government’s new focus on ambitious public projects that could rekindle business investment. But don’t expect big results too soon.

“It’s probably not a 2026 story. It’s probably something more like next year or even 2028.”

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In a quarterly monetary policy report, the central bank maintained its forecast for modest growth in 2026 and 2027 and said inflation would hover around the two per cent target.

Wednesday’s decision was the second time in a row the bank has stayed on the sidelines. Businesses will take time to adjust to the effect of U.S. tariffs, it said, noting that hiring intentions remain soft.

“While Council judges the current policy rate is appropriate based on our outlook, the consensus was that elevated uncertainty makes it difficult to predict the timing or direction of the next change in the policy rate,” Macklem said in his opening remarks after the rate announcement.

Hard to predict next moves

Economists and markets are divided on where monetary policy is headed this year.

Many economists expect there could be another cut to support an economy grappling with President Donald Trump’s tariffs. Money markets though are pricing in no cuts through 2026, but bets tilt toward a hike in the last quarter.

“Geopolitical risks are elevated and the upcoming review of the Canada-United States-Mexico Agreement is an important risk to the outlook,” Macklem said.

Money market bets did not change much after the rates decision was announced.

The Canadian dollar firmed after the decision with the loonie trading up 0.28 per cent to C$1.3535 against the U.S. dollar, or 73.88 U.S. cents.

Canada’s economy has held up relatively well amid tariffs on critical sectors such a steel, autos and aluminum.

Growth in 2025 higher than expected

The bank says 2025 growth was 1.7 per cent, up from the earlier projection of 1.2 per cent in October.

The growth outlook for 2026 remains 1.1 per cent, while 2027 was revised a notch down to 1.5 per cent from 1.6 per cent projected last year.

Macklem reiterated that the risks to inflation going up due to tariffs would likely be offset by a downward pressure on prices due to excess supply.

Household spending is expected to continue growing modestly, supported by past rate cut and rising disposable incomes, Macklem said, adding that the central bank expected modest strengthening in business investment.

The BoC expressed hope that the restructuring the economy was going through due to tariffs would support some recovery in productive capacity.

“But it will all take time,” Macklem said.

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From December, money markets have started betting on odds of a rate hike late this year after a long pause for most of the year. But some economists differ given the uncertainty around the upcoming renegotiations of the United States-Mexico-Canada (CUSMA) free trade pact.

Related: Canadian GDP growth slow down expected in 2026, FCC says

The central bank had indicated in October after cutting rates by 25 basis points that the benchmark rate was about the right level as inflation continued to be within its target range.

It had also admitted that it did not have the tools to tackle the structural impacts to the economy unleashed by the U.S. tariffs and the related uncertainty.

Majority of economist expect steady rate

A Reuters poll of economists showed on Friday that nearly 75 per cent of the 35 economists polled forecast the central bank will keep rates steady through 2026, a larger majority than the just over 60 per cent who expected that outcome in December.

Money markets are pricing policy to remain on hold or tilt slightly toward easing through mid-2026, before turning to modest tightening expectations in the final quarter of 2026.

The BoC had reduced rates by 100 basis points last year, bringing them down to the lower level of its neutral range, a so-called policy interest rate band where the economy is neither being stimulated nor restricted by rates.

However, some economists say that for the rates to be actually stimulative and support the economy, they have to come down even further outside of the neutral range.

“We are still in the zone of what the bank thinks to be neutral,” said Doug Porter, chief economist at BMO Capital Markets.

“If the unemployment rate is rising and we have a lot of trade uncertainty, why would rates just be neutral,” he said.

Companies subdued despite muted tariff effects

A recent survey of businesses and consumers by the BoC showed that business sentiment of Canadian companies remained subdued amid trade tensions and consumers were worried about their jobs and debt payments.

However economic data has also shown that there has been limited impact of tariffs beyond the directly hit sectors of steel, aluminum, lumber and automotive. Consumer prices have largely remained stable, the economy has grown modestly and job creation has been solid from September through November.

“Our baseline is they hold rates until a year from now and then they hike, not a start of a tightening cycle, but basically return the policy rate to the neutral midpoint,” said Tony Stillo, director of Canada Economics at Oxford Economics.

He cautioned, however, this assumption was based on a successful renegotiation of the CUSMA deal, where the tariffs on some sectors remain but to a lesser extent than what they are now.

The BoC will announce its monetary policy decision on the morning of Jan. 29. It will also release the quarterly Monetary Policy Report, where it will resume its previous practice of sharing single-point forecasts for the economy and inflation.

The MPR is expected to have an updated outlook on the impact of the federal budget on the Canadian economy.

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Despite tariffs between 25 per cent and 50 per cent on some critical sectors such as cars, lumber, aluminum and steel, Canada’s economy has shown signs of strength.

Third quarter annualized GDP grew by 2.6 per cent, much more than expected, while employment data showed the economy added 181,000 new jobs between September and November.

“So far, the economy is proving resilient,” Macklem said in opening remarks to reporters, adding that inflationary pressures continue to be contained. Overall inflation is just above the bank’s two per ent target.

“Governing Council sees the current policy rate at about the right level to keep inflation close to two per cent while helping the economy,” said Macklem.

GDP growth expected to be weak

Uncertainty remains high and if the outlook changes, the bank is ready to respond, Macklem said, reiterating comments he made when the bank cut rates in October to their current level.

The U.S. Federal Reserve will also announce a rate decision on Wednesday and a majority of economists expect it will cut rates by 25 basis points.

Macklem said even though the economy had shown some resilience, he expected GDP growth to be weak in the fourth quarter and hiring intentions to be muted.

While the economy is adjusting to tariffs, volatility in trade and quarterly GDP numbers are making it more difficult to assess the underlying momentum of the economy, Macklem noted.

The recent data has “not changed our view that GDP will expand at a moderate pace in 2026 and inflation will remain close to target.”

Andrew Kelvin, Head of Canadian and Global Rates Strategy at TD Securities called the bank’s commentary a fairly cautious tone.

“It leads me to be very comfortable with the idea that the bank will be on hold for quite some time,” he said.

Choppiness in inflation

The consumer price index eased to 2.2 per cent in October but economists have regularly flagged that measures of core inflation, which strips out volatile components, have stayed around three per cent, the top end of the BoC’s inflation target.

In the months ahead, the BoC expects some choppiness in headline inflation which would push inflation temporarily higher in the near term.

But Macklem said the ongoing economic slack would roughly offset these cost pressures. He said the bank expects the growth in final domestic demand to resume after registering a flat growth in the third quarter.

The Canadian dollar weakened after the announcement and was trading down 0.13 per cent to 1.3865 to the U.S. dollar, or 72.12 U.S. cents. Yields on the two-year government bonds fell 3.3 basis points to 2.556 per cent.

— Additional reporting by Nivedita Balu and Fergal Smith

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The removal of a carbon levy on gasoline this year continued to depress yearly price increases for the past few months. Barring the carbon levy removal, the annual consumer price index rose by 2.7 per cent in October from 2.9 per cent in September, Statistics Canada said.

Analysts polled by Reuters had forecast the inflation to be at 2.1 per cent for October, down from 2.4 per cent in September. On a monthly basis, they forecast inflation to be 0.2 per cent.

On a monthly basis, CPI inflation was in line with forecasts, StatsCan data showed.

The Bank of Canada has cited stable inflation as one of the prime reasons to signal a halt in rate cuts last month. A further easing in October is likely to bolster its confidence to stand pat on the current policy rate of 2.25 per cent next month.

A bigger monthly decline in the price of gasoline in October brought down the annual price drop of the fuel to 9.4 per cent in October compared with a drop of 4.1 per cent in September.

Food prices rose 3.4 per cent in October

Another contributor to the slower increase in inflation was food prices, which rose 3.4 per cent in October, down from a 4.0 per cent increase in September.

Despite the deceleration, prices remained elevated and have exceeded overall inflation for nine consecutive months, StatsCan said.

Mortgage interest costs, a part of shelter inflation, increased at an annual pace of 2.9 per cent in October. This was the first time in more than three years that they came down below three per cent.

However, rent inflation, another part of shelter inflation, rose above five per cent, clocking an acceleration for two months in a row.

Due to volatility in prices and the government’s tax breaks, the BoC and economists have tracked the measures of core inflation to gauge price trends.

Canadian dollar weakens on data

One of the core measures of inflation, the CPI-median, or the centermost component of the CPI basket, was at 2.9 per cent in October, down from a downwardly revised 3.1 per cent in September.

The other core measure, CPI-trim, which excludes the most extreme price changes, edged down to 3.0 per cent in October from 3.1 per cent in September.

“It would take a longer period of easing price pressures, combined with indications of economic growth deteriorating again, to bring the Bank of Canada back off the sidelines,” Andrew Grantham, a senior economist at CIBC Capital Markets wrote in a note.

The Canadian dollar weakened a bit after the data and was trading down 0.11 per cent to 1.4035 against the U.S. dollar, or 71.25 U.S. cents. Bond yields for the two-year government bonds fell and were down 0.3 basis points to 2.475 per cent.

Price increases in October were mainly driven by cellular plans and insurance costs.

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Why it matters: Canadian farmers are facing uncertain markets and a squeeze to grain farm profits.

At FCC’s 2025 economic update webinar Sept. 18, FCC executive vice-president J.P. Gervais pegged overall economic growth in 2025 at 1.1 per cent — just shy of the Bank of Canada’s 1.3 per cent forecast. FCC estimates one per cent growth in 2026, virtually in line with Bank of Canada estimates.

Both forecasts represent less growth than in 2023 and 2024, which saw economic growth of 1.5 and 1.6 per cent, respectively.

“If you think of 2 per cent as the potential of the economy, we’re really going under the speed limit,” said Gervais, who placed much of the blame on tariffs but did not discount other “underlying issues” for their roles in a softening Canadian economic outlook.

Gervais urged producers not to get too comfortable with agri-food’s almost universal lack of exposure (97 per cent of food can still pass the U.S. border tariff-free) thanks to inclusion under the Canada-U.S.-Mexico trade agreement.

However, a lot of confusion around U.S. tariffs remains on both sides of the border.

“Even on the U.S. side, lots of customers are telling us that their sales are being taxed and that they actually shouldn’t be because they are compliant. They’ve gone through the process of proving their compliance with CUSMA,” Gervais said.

“Second of all, there’s also uncertainty with regards to what is going to happen in the future. And with uncertainty comes kind of a little reluctance on the part of businesses to invest in their business, just waiting to see how policy is going to evolve on the U.S. side.”

A significant chunk of of Canada’s exports are non-exempt products such as lumber, steel and aluminum.

“All of that does have an impact on the economy. And then we got the second quarter GDP estimate, and it came negative.”

That said, Gervais pointed to the Building Canada Act, intended to fast-track the building of Canadian infrastructure, as a “great first step” that will reverberate across industries, including agriculture.

“We’re talking about more infrastructure. And if you’re thinking about investment in ports, rail, roads, all of these can actually have some significant positive spillovers in the rest of the economy, making it easier for businesses to do business and to invest and sell and develop markets and so forth,” he said.

“Even defence spending, to some extent, is a positive can have a positive spillover.”

However, all of that is going to take time. During that time, it will be up to the Bank of Canada — which Gervais praised for its Sept. 17 overnight rate reduction of 25 basis points — to find ways to reignite the country’s economy, he said.

To that end, Des Sobool, deputy chief economist at FCC, forecasts the central bank will cut interest rates by another 50 basis points by the end of 2025.

“This is really in response to a slowing economy,” said Sobool.

“The Bank of Canada doesn’t want a recession to happen … but we see the economy (and) how poorly it’s performing.”

Watch for more coverage of FCC’s Sept. 18 economic forecast.

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But for the second consecutive quarter, the central bank declined to give detailed forecasts for the Canadian economy, citing the uncertainty around U.S. trade policy.

Why it matters: The Bank of Canada says the risk of a severe, escalating global trade war has diminished.

The bank also said that if the economy weakened further it could cut rates, provided upward pressures on inflation were kept in check.

Although Canada faces tariffs on three sectors, the overall effects have been contained. The economy has weakened only slightly, job growth is robust and closely-tracked metrics of core inflation are firm.

“Canada’s economy is showing some resilience so far… inflation is close to our two per cent target, but we see evidence of underlying inflation pressures,” said Governor Tiff Macklem.

The situation could change on August 1, the deadline for the United States and Canada to reach a trade deal and the date when U.S. President Donald Trump has threatened to impose 35 per cent tariffs on some Canadian goods.

The BoC aggressively eased rates by 225 basis points starting in June last year, but since March has paused as it waits to assess the impact of tariffs on the economy and prices.

“Since April, the risk of a severe and escalating global trade conflict has diminished,” the bank said in its quarterly monetary policy report. “Nevertheless, how U.S. trade policy will unfold remains highly uncertain.”

Three economic scenarios

Rather than issuing forecasts, the bank presented three different scenarios.

The first scenario assumes existing tariffs on steel, aluminum, automobiles and on goods not compliant with a continental free trade pact will be maintained, GDP contracts by 1.5 per cent in the second quarter of 2025 and rises by one per cent in the second half before reaching 1.8 per cent in 2027, while total inflation stays close to two per cent over the next two years.

The other scenarios look at the impact should tariffs around the world decrease or increase.

In the de-escalation scenario, lower tariffs improve the growth outlook and reduce the direct cost pressures on inflation while in the opposite scenario, higher tariffs weaken the economy and increase direct cost pressures, Macklem said.

“We will be following tariff developments closely and assessing indicators of underlying inflation,” he said, adding that the central bank would continue to support economic growth while ensuring inflation was controlled.

“If a weakening economy puts further downward pressure on inflation and the upward price pressures from the trade disruptions are contained, there may be a need for a reduction in the policy interest rate,” he said.

Money markets assume a more than 81 per cent chance of another hold in interest rates in September and do not expect any more cuts this year.

“The Bank appears to be getting a little more comfortable with the notion that the Canadian economy will need the support from further interest rate cuts in the future,” Andrew Grantham, senior economist at CIBC Capital Markets wrote in a note.

“It is clearly not there yet and upcoming data will remain more important,” he added.

The Canadian dollar weakened after the monetary policy report and traded down 0.30 per cent to 1.3811 to the U.S. dollar, or 72.41 U.S. cents.

— Additional reporting by Fergal Smith, Nivedita Balue and Anna Mehler Paperny.

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Instead, the central bank produced two scenarios on what could happen, including one which predicted a deep recession in Canada and a spike in inflation.

Governor Tiff Macklem said the bank – which began cutting last June – had kept rates on hold as it gained more information on the impact of tariffs and would proceed carefully.

For the latest tariff news and analysis, visit the Western Producer’s tariff page.

“That means being less forward looking than usual until the situation is clearer,” he said in his opening remarks after the rates decision was announced.

“It also means we are prepared to act decisively if incoming information points clearly in one direction,” he said. The bank’s monetary policy would ensure that inflation remained under control and would support economic growth, he added.

Possibility of more aggressive approach still open

Economists construed the governor’s commentary as an indication that the bank’s current pause was not an end to the easing cycle and it would jump in to support the economy if needed.

“He’s clearly laid open the possibility of getting a lot more aggressive if the economy deteriorates substantially,” said Doug Porter, chief economist at BMO Capital Markets.

Andrew Kelvin, head of Canadian and global rates strategy, TD Securities, said that going forward the weakness is expected to pile up in the economy and that would force the bank to cut rates again.

Currency swap markets are betting on 54 per cent odds of another pause on June 6, when the bank announces its next monetary policy decision.

The Canadian dollar extended gains after the policy decision and was trading firmer by 0.51 per cent to 1.3884 against the U.S. dollar, or 72.03 U.S. cents. Yields on the two-year government bonds were up 0.9 basis points to 2.541 per cent.

GDP expectations

In the near term, the BoC expects second-quarter GDP to be much weaker, after a 1.8 per cent growth forecast for first quarter. Inflation is seen dipping to about 1.5 per cent in April, mainly due to the removal of carbon taxes and lower crude prices.

The bank said it was difficult to predict the path of the economy for the long term.

“Forecasts for economic growth are of little use as a guide to anything,” Macklem said.

For the first time since the pandemic the BoC scrapped the economic forecasts it gives in a quarterly monetary policy report. It instead offered two possible scenarios.

The first assumes that most of the tariffs are eventually withdrawn through negotiations, which would stall GDP in the second quarter. The economy then expands moderately, while inflation sinks to 1.5 per cent before returning to the two per cent target.

In the second scenario, the bank assumes the tariffs spark a long-lasting global trade war. In this case, the Canadian economy goes into a significant recession for a year while inflation spikes to 3.5 per cent in mid-2026.

Macklem said that under this scenario, the U.S. tariffs would permanently reduce Canada’s potential output and lower the country’s standard of living.

“To be clear, these are only two of many possible scenarios, and even these do not span the possible outcomes,” he said.

Canada’s economy, which had been teetering for most of last year, found its footing as 2024 was ending.

But U.S. President Donald Trump’s decision to unilaterally slap a barrage of tariffs on Canada and Mexico followed by on the rest of the world have dented business investments and consumer spending.

This is evident in the recent hard data which showed lack of job growth, elevated inflation and weaker economic growth.

—Additional reporting by Fergal Smith, Anna Mehler Paperny and Divya Rajagopal

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