A US-Canada trade deal centered on lowering the most onerous US duties, like those on steel, aluminium and motor vehicles, would not stop the economy from slowing later this year, but it would improve the near-term growth outlook. In that case, the Bank of Canada would likely feel less compelled to support growth, making further policy easing less likely. However, a deal within the self-imposed 30-day deadline is not guaranteed, especially since Prime Minister Carney is reportedly refusing to budge on issues like the digital services tax, while making tariff threats of his own.
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