Look at what is happening in Canada.
July 3 (King World News) – Gerald Celente: Canada’s GDP contracted by 0.1 percent in April, Statistics Canada reported, and said early indications are that the economy shrank by a similar amount in May.
Factory production puckered by 1.9 percent for the month, its worst contraction since April 2021, and accounted for most of April’s decline.
Manufacture of durable goods, intended to last at least three years, was off by 2.2 percent. The output of nondurables retreated 1.6 percent.
Wholesale trade declined 1.9 percent.
In contrast, the services sector crept up 0.1 percent for the month as five Canadian teams made the National Hockey League playoffs for the first time in eight years. Activity in arts, entertainment, and recreation businesses jumped 2.8 percent.
April was the first full month that U.S. tariffs of 25 percent targeted Canadian shipments to the U.S., particularly in autos and auto parts, aluminum, and steel. The import duties’ bite will be more painful as the year progresses, TD economist Marc Ercolao wrote in a note.
“April’s underperformance, combined with downbeat expectations for May, leave second-quarter growth tracking a mild contraction, setting up a sharp pullback from Q1 readings,” he said. “Tariffs add to the headwinds from plunging business and consumer sentiment.”
A contraction in the second quarter would be a reasonable outcome, CIBC senior economist Andrew Grantham wrote in a note.
“An average growth rate of only around 1 percent for the first half of the year, and weak momentum heading into the summer, suggests that slack in the economy is continuing to build and that further interest rate cuts from the Bank of Canada will be needed to support a recovery later in the year,” he said.
Canada’s central bank held its policy rate at 2.75 at its June meeting while officials wait to see how the impact of the tariffs plays out. The bank’s policy committee will meet to discuss the rate again on 30 July.
TREND FORECAST:
Totally ignored by the Presstitute media, is that Canada, one of the fiercest fighters of the COVID War that locked down the nation with draconian mandates—slaughtered its economy.
Both those days are forgotten. Instead, while fundamental, the focus is on the Trump trade war and that is what is being blamed for the economic contraction. Canada is one of the U.S.’s two top trading partners. (The other is Mexico.)
If tariffs drive Canada into a recession, Canadian households and businesses will buy less from their U.S. counterparts. In that way, a Canadian recession will also drag down the U.S. economy. As reported by AI Overview, “The US and Canada have a very large and integrated trade relationship. In 2022, the total trade in goods and services between the two countries was $908.9 billion. The US exports approximately $427.7 billion to Canada and imports around $481.2 billion. This makes Canada the US’s largest trading partner.”
U.S. GDP shrank in this year’s first quarter. If it does so again in the second quarter, it will meet the definition of a recession.
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