The White House has announced that President Trump will return to Canada to participate in a Group of 7 leaders summit in Kananaskis, Alberta, scheduled for June.
This week, G7 finance ministers and central bankers convened for their preliminary meeting in Banff, Alberta. Reports indicate that the economic policymakers concluded their three-day meeting with a statement expressing support for Ukraine and issuing a warning to Russia regarding potential additional sanctions if peace efforts do not progress.
While the finance ministers did not issue a formal statement condemning the economic turmoil caused by the imposition of tariffs, they acknowledged that "trade and economic policy uncertainty was high and weighing on global growth."
In a video call following the meetings, Tiff Macklem, the governor of the Bank of Canada, discussed the implications of U.S. tariffs on the global economy, particularly highlighting that Canada, being closely integrated with the U.S., faces significant challenges from these trade policies.
Macklem pointed out that despite Canada’s ongoing efforts to diversify its trade relationships, geographical proximity and established trade agreements have made business with the U.S. very appealing. The current situation with tariffs has prompted Canadian businesses to seek alternative markets to mitigate risks associated with the Canada-U.S. supply chain.
When asked about potential economic integration with China as a response to U.S.-Canada tensions, Macklem emphasized the importance of achieving a new trade deal with the United States to reduce uncertainty for Canadian businesses while also seeking to broaden market opportunities.
Regarding progress on tariffs, Macklem noted that discussions during the G7 meetings had improved in tone, although he acknowledged President Trump's recent tariff threats as unhelpful.
Macklem expressed concerns about the uncertainty stemming from fluctuating tariffs, stating it has led businesses to delay investments, which could impact economic growth across nations. However, he did note a decrease in uncertainty since early April.
On the topic of inflation due to global price increases associated with U.S. tariffs, Macklem indicated that current data does not suggest significant inflation yet, but he emphasized the need to monitor the situation closely.
Finally, Macklem confirmed that the United States remains engaged in the global trading system, with Treasury Secretary Scott Bessent actively participating in the G7 meetings and finding them productive.