Meanwhile in the real world, from the Canadian horse's mouth: However, an advanced estimate for July showed zero growth from the month before, suggesting the solid start to the summer may have been short lived. But an economic rebound led by strong exports suddenly seems precarious given the barrage of new tariffs and threats of steeper ones from the U.S. President Donald Trump’s administration. “I’d be very careful to label this a victory for Canada’s economy,” said Torsten Jaccard, a professor at the Vancouver School of Economics at UBC. Friday’s report might be the kind of short-run noise that occurs in a “highly volatile policy environment,” he added. While business investment increased in the quarter – driven by higher spen ding on machinery and equipment – it’s set to be challenged as trade relations deteriorated between Ottawa and Washington, resulting in U.S. tariffs of 50 per cent on goods previously shielded by the U.S.-Mexico-Canada trade pact. The levies, set to target $28-billion or 5 per cent of shipments to the U.S., came into effect Aug. 22, just hours after trade talks between the countries collapsed. Economists expect the impact to be concentrated in targeted sectors, but retaliatory tariffs announced by Ottawa set to take effect Sept. 8 are expected to add modest inflation pressure and potentially provoke further harmful U.S. trade policies. For the balance of the year, trade uncertainty and tariffs will be a headwind for GDP growth. It could also lead to higher a unemployment rate, which Desjardins economists said could reach 7 per cent by the end of the year if the newly introduced tariffs remain in place. https://www.theglobeandmail.com/business/article-economy-rebounds-second-quarter-trade-tensions-shift-outlook/
