With steel and aluminum tariffs imposition date nearing - the Governor for the Bank of Canada, Stephen Poloz said a trade war is bad for everyone.
The tariffs, and retaliatory measures, are scheduled to come into effect on July 1.
Poloz said consumers and producers will be affected with the 25 per cent steel tariffs.
“Somebody is paying for the 25 per cent, and if steel is present in all those supply chains then that price gets passed through,” Poloz said. “What happens is the consumer has less buying power than before. That’s how everybody loses a trade war. Companies may face a level playing field, but they’ll be selling less steel than before, but people will be buying less because the price is higher.”
Poloz says when dealing with the United States tariff threats, they wait until tariffs are announced before reacting - rather than preparing for an outcome that may not come to fruition.
The Bank of Canada will be making an announcement on July 11 on how the interest rate will change.
"Today, as we approach our next interest rate decision, we are working to incorporate in our projections the effects of the recently announced U.S. steel and aluminum tariffs, along with retaliatory measures, both in Canada and globally,” Poloz said.