Canada’s central bank cut its key lending rate to 2.5% today, offering a boost to borrowers in an economy squeezed by US President Donald Trump’s trade war.<\/p>\n
The Bank of Canada had held its rate at 2.75% since March as it weighed the impact of Trump’s fluctuating tariffs on Canadian businesses heavily dependent on exports to the US.<\/p>\n
But the bank said there was clear evidence that Trump’s protectionism was pinching the global economy.<\/p>\n
“After remaining resilient to sharply higher US tariffs and ongoing uncertainty, global economic growth is showing signs of slowing,” the bank said in a statement.<\/p>\n
It noted that Canada’s GDP declined 1.5% percent in the second quarter of 2025, “with tariffs and trade uncertainty weighing heavily on economic activity.”<\/p>\n
In the first quarter, exporters benefitted from a rush of orders from the US as businesses tried to stock up before Trump’s tariffs fully took hold, the bank said.<\/p>\n
But Canadian exports fell by 27% in the second quarter as rush orders eased.<\/p>\n
Trump has so far maintained tariff exemptions on goods compliant with an existing North American free trade agreement, partly muting the damage to Canada’s economy.<\/p>\n
But punishing tariffs in key sectors – primarily cars, steel and aluminum – are causing damage.<\/p>\n
“Job losses have largely been concentrated in trade-sensitive sectors, while employment growth in the rest of the economy has slowed, reflecting weak hiring intentions,” the Bank of Canada said.<\/p>\n
Canada was the first G7 country to begin cutting rates last year, following several hikes to tame pandemic-fueled inflation.<\/p>\n
While today’s cut was largely expected by analysts, the bank warned it would proceed cautiously, given the risk that US protectionism could drive up inflation for Canadian consumers.<\/p>\n
The bank said it would be watching how “reconfigured supply chains are passed on to consumer prices and how inflation expectations evolve.”<\/p>\n","protected":false},"excerpt":{"rendered":"Canada’s central bank cut its key lending rate to 2.5% today, offering a boost to borrowers in an…\n","protected":false},"author":2,"featured_media":35223,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-35222","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/35222","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=35222"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/35222\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/35223"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=35222"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=35222"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=35222"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}