Monthly Economic Forecast on U.S. Tariffs and Trade

This document is a monthly economic forecast report that discusses the impact of U.S. tariffs on trade and the Canadian economy as of August 2025. It outlines the current tariff rates and their implications for Canadian products, noting that the anticipated benefits of these tariffs have not materialized as expected. The report details the expected deterioration in the Canadian labor market alongside rising fiscal stimulus, leading to a maintained policy stance by the Bank of Canada. It also highlights the anticipated timeline for the U.S. Federal Reserve to cut rates, which is projected for December, contingent on labor market conditions. The report presents a breakdown of forecast changes, including expected GDP growth rates and unemployment trends in both Canada and the U.S. Additionally, it discusses the effectiveness of tariffs in revitalizing U.S. manufacturing and narrowing the trade deficit, concluding that current tariff strategies are unlikely to achieve their intended goals. The document emphasizes the ongoing challenges faced by the manufacturing sector and the broader economic implications of these tariffs.