On August 1, US President Donald Trump announced higher tariffs on several countries, including Canada, which will now face a 35% tariff on goods not included in the United States-Mexico-Canada Agreement. The effective tariff rate on Canadian goods will rise to just above 5%, based on Bank of Canada calculations. These tariffs are expected to go into effect on August 7. Looking ahead, the announcement provides some clarity on tariffs, while many countries, including Canada, continue to negotiate with the US. Looking at the week ahead, here are some key announcements to watch for.

• Statistics Canada will announce Canada’s trade balance for June today. Canada ran a trade deficit of $5.86 billion in May. Trade tensions with the US continue, weighing on export and import activity with Canada’s largest trade partner.
• Canada’s unemployment rate will be released on Friday. Canada’s economy added 83,100 jobs in June, which helped push the unemployment rate lower to 6.9%.
• Looking beyond Canada, US services sector activity will be announced today, European retail sales on Wednesday, China’s trade balance on Wednesday night, the Bank of England’s interest-rate decision on Thursday and China’s inflation rate on Friday.
• Key earnings in Canada include Suncor Energy, Shopify, Algoma, Manulife, Restaurant Brands International, Canadian Tire, Quebecor, Brookfield, RioCan, Saputo and Constellation Software. Notable earnings in the US include Pfizer, Walt Disney, McDonald’s and Uber.

Financial markets wobbled last Friday in response to tariff announcements and a lacklustre US labour market report, which raised concerns about the global economy. This week in Canada, the trade and labour market reports will give some insight into how Canada’s economy is being impacted by trade tensions with the US. A Bank of Canada report showed that the US’s effective tariff rate on Canada is just above 5%. Canada’s economic activity has slowed this quarter but remained relatively resilient in the face of mounting trade and economic pressures.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.