On September 4, 2024, the Bank of Canada cut its key policy rate by 25 basis points to 3% in response to sluggish economic growth and the threat of U.S. tariffs. Governor Tiff Macklem warned that a prolonged trade conflict could severely impact Canada's economy, predicting possible growth reductions of 2.5% in the first year and 1.5% in the second if retaliatory tariffs are enacted. The central bank adjusted its growth forecasts down to 1.8% for 2025 and emphasized the dual challenge of managing inflation and growth under the existing economic conditions. The adjustments reflect ongoing economic pressures stemming from international trade relations.