Canada 10-Year Yield Falls as Trade Risks Rise

2026-08-24 17:50 By Isabela Couto 1 min. read

The yield on Canada’s 10-year government bond fell to about 3.67% after touching a more than two-year high of 3.76% on August 21st, as a re-escalation in the trade war with the US put Canada’s economic recovery at risk.

US President Donald Trump said tariffs on all Canadian cars, trucks, automotive parts and steel would rise to 50% on January 1, 2027.

This came after Prime Minister Carney vowed to retaliate against the initial series of US tariffs imposed after trade talks fell through.

Washington imposed 50% tariffs on furniture, plastics, plywood and electrical equipment, adding to existing 25% tariffs on steel, lumber and autos.

Risks to growth from higher tariffs have reduced the case for a BoC rate hike this year.

Growth is now expected to contract just as the economy has started to recover.

In July, Canada added 75,000 jobs, while inflation edged up to 2.9%, largely due to gasoline prices rather than broad-based price pressures.



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