The Bank of Canada is holding its prime lending rate at 2.75 per cent.

Some economists were expecting a reduction because of the negative impact of U.S. tariffs and resulting counter tariffs.

Continued economic uncertainty and global upheaval means the Bank of Canada has been less forward-looking than usual.

Starting today, U.S. tariffs on steel and aluminum imports have doubled to 50 per cent.

Bank of Canada Governor Tiff Macklem says they’re awaiting a greater understanding of the latest tariff increases and their impact on the economy.

“Since our April decision, the U.S. administration has continued to increase and roll back various tariffs” Macklem told reporters at today’s policy decision news conference.

“China and the United States have stepped back from extremely high tariffs, and bilateral trade negotiations have begun with a number of countries. The extreme financial turmoil we saw in April has moderated, and stock markets have recovered their losses.”

“However, the outcomes of the trade negotiations are highly uncertain. Tariffs are well above their levels at the beginning of 2025, and new trade actions are still being threatened. The recent further increases in U.S. tariffs on steel and aluminum announced today underline the unpredictability of U.S. trade policy” says Macklem.