Canada

Research evidence excerpt

Canada

Michael S Hanson (1-212) 622-8603 North America Economic Research J P M O R G A Nmichael.s.hanson@jpmchase.com

JPMorgan Chase Bank NA 18 June 2026

Bennett Parrish (1-212) 622-9003

bennett.parrish@jpmchase.com

JPMorgan Chase Bank NA

Canada Trump questions continuing USMCA

In other political news this week, President Trump again

• “Regime change” at Fed contrasts with BoC stability made headlines over US trade policy, stating that he thought

• Rate divergence makes sense given different economic the US would “do better as a country if we don’t have an

outlooks — and uneven risks from US trade policy agreement,” citing the US trade deficit with Canada. But that

• We look for May headline CPI to pop but still soft core framing overstates the imbalance: once services are included,

the overall trade deficit with Canada is much smaller (Figure

How will “regime change” at the Fed impact the Bank of 2). He also mused about USMCA expiring immediately or

Canada? Initially it presents a contrast in styles. Whereas Car- terminating it, but both of those outcomes strike us as unlike-

ney moved from central banking to politics promising to ly. But, as we flagged recently, the US administration’s rheto-

“govern in econometrics”—that is, to extend the BoC’s tech- ric is increasing the chance that the process will devolve to

nocratic perspective—Warsh has eschewed traditional central annual reviews, which Trump did indicate he favored.

banking frameworks and analysis as he moved from the polit-

ical sphere into the top role at the Federal Reserve. In his first Figure 2: Nominal trade balance with the US

press conference, Warsh presented platitudes on price stabili- US$bn, sa

ty without yet offering clarity or specificity on how it will be 30

achieved.