As reported by Reuters, Canada faces extreme risks from US tax and trade policies according to the International Monetary Fund (IMF).
"In the preliminary findings of its annual review of the Canadian economy, the IMF said that interest rates should be raised only gradually, even as inflationary pressures are building and that the Bank of Canada’s approach appears to be broadly appropriate. The Bank of Canada has raised rates three times since July 2017 and there are growing expectations that the central bank will hike again this July.
“However, economic anxiety is high due to trade tensions, uncertainty about the outcome of NAFTA negotiations, and the impact of the U.S. Tax Cuts and Jobs Act on Canada’s medium-term competitiveness,” the IMF said in a statement.
There is “considerable” uncertainty over what impact U.S. tax reform will have on Canada, which could make Canada a less attractive place for investment in the medium-term, the IMF said.
As well, the prolonged renegotiation of the North American Free Trade Agreement (NAFTA) could dampen investment. If NAFTA talks fail and tariffs revert to World Trade Organization rules, Canada’s long-run economic growth could be 0.4 percent lower than it would be otherwise, the IMF said."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.