Midnight Madness

中文标题

午夜疯狂

Scotiabank Economics08/23/2026updated 10/17/2026

Multiple economies

Citable research brief

Core conclusion · Tlines extraction

Scotiabank Economics assesses the collapse of Canada-US trade talks, noting muted market reactions, modest macro impact, and risks in both directions.

Institution: Scotiabank Economics
Published: 08/23/2026
Research topic: Tariffs · Canada · Fed policy
Time horizon: short-term · medium-term

Key arguments

Early CAD reaction is muted, mostly driven by lower oil futures.
Canada was right to walk and retaliate as the US overstepped red lines.
Macro impact is small so far; growth may lean to 2.0% in 2027.
BoC path is unclear, with risks of fewer hikes or higher inflation.
Avoid going to the darkest place; escalation is not in either country's interest.

Key numbers

Effective tariff rate on US goods imports: 11.5%
Effective tariff rate on US goods and services imports: 9.6%
Effective tariff rate on total Canadian exports of goods: 6.5%
Effective tariff rate on Canadian exports of goods to US: 8.6%
Effective tariff rate on total Canadian exports of goods and services: 4.6%
CAD depreciation: about a quarter of a cent
2027 GDP growth forecast: 2.0%

Main risks

Potential escalation of trade war could worsen economic outlook.
Higher inflation could tie BoC's hands, limiting rate cuts.
US tariff pass-through on core PCE complicates Fed stance.
Sector-specific shocks may be severe for affected industries.
Uncertainty over next steps could trigger market volatility.

Corresponding source evidence

The US 50% tariffs on $20 billion of imports sans CUSMA exemptions from Canada went into effect at midnight. This move raises the effective tariff rate on US goods imports to 11.5% and on goods and services to 9.6%. · short-term
The US would also get renewed tariff pass through on goods in core PCE, thereby complicating the stance of the Federal Reserve. · medium-term

Conditions / invalidation

If tariffs pass through to core PCE.

Context: the conclusion is Tlines' automated extraction, not the institution's wording. Quoted evidence is publisher wording. Scope and date must travel with the conclusion.