06:58 AM EST, 02/07/2025 (MT Newswires) -- North America has seen a "reprieve" this week in what could have been one of the largest trade shocks in 100 years -- 25% tariffs imposed on Mexico and Canada by the United States that have been delayed by 30 days, said RBC.

Still, uncertainty persists and hangs over the Canadian economy like an ominous cloud, likely weighing on business activity and consumer confidence, noted the bank. Even as the list of unknowns remains long, the past week has taught RBC a few things about what a trade shock could look like for the Canadian economy.

Here are five things the bank learned this week that are critical for the trade discussion:

-- Trade angst isn't likely to go away anytime soon. The America First Trade Policy is set to deliver recommendations by April 1 and it involves an investigation into whether foreign countries are subjecting U.S. citizens and companies to "discriminatory or extraterritorial taxes." Second, Mexico, Canada and the U.S. will be preparing for the July 2026 review of the USMCA trade agreement. In addition, while Canada and Mexico averted tariffs, the U.S. imposed an additional 10% tariff on China, which prompted retaliatory measures from China.

-- The Bank of Canada would likely cut interest rates further.

-- Canada's retaliatory strategy would impact growth and inflation.

-- Sectors and provinces would be hit differently by proposed tariffs.

-- Fiscal strategies suggest both outlays and reforms could be in play.