Tariff clock ticks as Canada braces for July inflation data
Gasoline prices rose at a slower year-over-year rate in June (+20.5%), but RBC Economics estimates the pace picked up again in July, with gasoline averaging approximately 25% above year-ago levels, as ongoing conflict in the Middle East continued to disrupt shipping through the Strait of Hormuz.
For brokers monitoring the Bank of Canada’s (BoC) rate path, the headline figure matters less than what sits beneath it. Prices excluding food and energy are expected to tick to 1.9% from 1.8%, while the BoC’s preferred median and trim core measures are projected to hold near 2%.
“Growth in ‘core’ measures’ prices have remained near the 2% target,” the report said. Food price growth likely eased marginally in July but remained above 3%, according to the RBC forecast.
As Canada’s inflation data arrives, the broader trade environment continues to cloud the Bank of Canada’s rate outlook, with economists still firmly expecting the central bank to hold through 2026.
Section 338 tariffs: real, but contained
A weightier development lands Wednesday. US Section 338 tariffs covering roughly 5% of Canada’s goods exports — including apparel, electronics, and electrical appliances manufacturing — are scheduled to take effect August 19.
