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Ontario Halts U.S. Electricity Surcharge Amid Trade Tensions

  Ontario Premier Doug Ford has announced the suspension of a 25% surcharge on electricity exports to three U.S. states—Michigan, New York, and Minnesota—following a diplomatic overture from the White House. The surcharge, introduced just a day earlier, was Ontario's response to U.S. President Donald Trump's decision to double tariffs on Canadian steel and aluminum to 50%. The decision to pause the surcharge came after U.S. Commerce Secretary Howard Lutnick extended an "olive branch" by inviting Ford and Canadian Finance Minister Dominic LeBlanc to Washington for discussions on trade. The meeting, scheduled for Thursday, aims to address the escalating trade tensions and explore a renewal of the Canada-United States-Mexico Agreement (CUSMA). Ford emphasized the importance of diplomacy, stating, "When someone's putting out an olive branch, we sit back, we accept it—graciously, by the way—and let's start moving." While the U.S. has yet to retract its ta...
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Bank of Canada Poised for Another Rate Cut Amid Trump's Tariff Threats

 

The Bank of Canada is expected to announce its sixth consecutive rate cut this week, as economic pressures mount from both domestic and international fronts. Economists predict a modest quarter-point reduction, bringing the key policy rate down to 3%, following recent inflation and jobs data.

Canada's annual inflation rate fell to 1.8% in December, largely due to a temporary GST tax break introduced by the federal government. This has provided the central bank with some leeway to lower rates further. However, the looming threat of a 25% tariff on Canadian goods by U.S. President Donald Trump has added a layer of uncertainty.

Trump's tariff threats, which could take effect as soon as February 1, have raised concerns about a potential recession in Canada. The Bank of Canada is keenly aware of these risks and may feel a sense of urgency to act preemptively. Despite the recent deceleration in inflation, the possibility of a trade war with the U.S. could prompt the central bank to continue its rate-cutting spree.

The Bank of Canada's decision will be closely watched, as it navigates the delicate balance between stimulating economic growth and managing inflationary pressures. With the Canadian economy facing significant uncertainty, the central bank's actions in the coming weeks will be critical in shaping the country's economic trajectory.

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