President Donald Trump on Monday agreed to a 30-day pause on his tariff threats against Mexico and Canada as America’s two largest trading partners took steps to appease his concerns about border security and drug trafficking, the Associated Press reported. The pauses provide a cool-down period after a tumultuous few days that put North America on the cusp of a trade war that risked crushing economic growth, causing prices to soar and ending two of the United States’ most critical partnerships.

Canadian manufacturing activity increased at a slower pace in January as looming U.S. trade tariffs reduced confidence in the outlook, even as moves by clients to get ahead of the taxes led to the first increase in export orders in 17 months, Reuters reported. The S&P Global Canada Manufacturing Purchasing Managers' Index (PMI) fell to 51.6 in January from 52.2 in December. Still, it was the fifth straight month above the 50.0 no-change mark. A reading above 50 indicates expansion in the sector. U.S.

The Canadian economy gained strength at the end of last year, fueled by a rapid series of interest-rate cuts, as the northern nation braces for the Trump administration’s threatened 25% tariffs, Bloomberg News reported. Advance data suggested gross domestic product grew 0.2% in December, Statistics Canada said Friday. That’s a reversal from a 0.2% decline in November, the largest monthly contraction since December 2023 and weaker than a median estimate of a 0.1% drop from economists in a Bloomberg survey.

The Bank of Canada on Wednesday cut its benchmark rate for a sixth straight time, and warned of a significant shock to the economy from a U.S.-Canada trade conflict with tariffs of up to 25%, the Wall Street Journal reported. Bank of Canada Gov. Tiff Macklem said the central bank would be limited in offsetting the damage from a trade row, because policymakers would have to wrestle with both weaker growth and higher prices. The central bank sets interest rates to achieve and maintain 2% inflation.

The Canadian government said Friday it would provide extraordinary financing to Canada Post to avoid insolvency at the state-owned mail service, the Wall Street Journal reported. The bridge financing totals 1.03 billion Canadian dollars, or the equivalent of $720 million, and will be provided on an as-needed basis to pay obligations. The government said Canada Post will fall below its necessary operating cash requirements this year. “Providing this cash injection will prevent insolvency and ensure the continuity of postal services,” the government said.

Toronto-Dominion Bank is looking to sell about $9 billion of residential mortgage loans as the Canadian lender adjusts its balance sheet to comply with a new cap imposed by US regulators, part of a plea agreement reached last year for its role in failing to prevent money laundering, Bloomberg News reported. The portfolio for sale consists of so-called jumbo mortgages taken out by US homeowners with relatively high credit scores, according to people familiar with the matter. Bids on the pool are due next week, the people added, asking not to be named because the details are confidential.

For the first time since 2019, Canadian inflation stayed within the central bank’s target range for a full year, a mark of achievement for policymakers ahead of a potential tariff war that threatens to derail their progress, Bloomberg News reported. The consumer price index ended 2024 with a second consecutive monthly deceleration, rising 1.8% on a yearly basis in December, down from 1.9% previously, Statistics Canada reported Tuesday. The median estimate in a Bloomberg survey of economists was for a 1.9% gain.