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Economic impact of trade war still modest

President Donald Trump’s renewed criticism of Canada this week means that the end-September deadline for a new trilateral NAFTA agreement is set to pass without a deal, increasing the threat that Canada is included in the list of countries subject to new auto tariffs once they are announced. The silver lining is that, up to now at least, there are few signs that escalating trade tensions are having a notable impact on aggregate GDP or consumer prices.

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