Canada trade war could push inflation higher: Fed official
A trade fight with inflationary weight
The standoff intensified Saturday when the US began imposing 50% tariffs on Canadian products after negotiators failed to strike a deal. US Trade Representative Jamieson Greer confirmed no new talks were scheduled.
Canadian Prime Minister Mark Carney responded with plans for retaliatory tariffs, targeting steel, dairy, appliances, agricultural equipment, pulp, paper, and electronics, set to take effect Sept. 8.
Mortgage brokers have tracked the inflationary toll Canada tariffs could have on homebuilding costs since early in the trade conflict, and Sunday’s comments from Kashkari signal the pressure is far from over.
Canada is “an important trading partner for America,” he said — one that exchanged $880 billion in goods and services with the US in 2025, making it the second-largest trading partner behind Mexico.
“One of those supply shocks is the trade and tariff conflicts,” he said of the inflation drivers of the past five years.
