12:59 PM EDT, 03/20/2025 (MT Newswires) -- Bank of Canada Governor Tiff Macklem on Thursday noted the Canadian economy managed a soft landing after the pandemic, but now faces a new crisis.

In a speech before Calgary Economic Development in Alberta, Macklem said: "Since President Trump began threatening to impose a wide range of tariffs on Canadian exports, uncertainty has increased sharply. Depending on the extent and duration of tariffs, the economic impact could be severe. The uncertainty is already causing harm.

"There's a lot we don't know. Some new tariffs are in place on steel and aluminium as well as on goods not in compliance with the Canada-US-Mexico Agreement. We don't know how long these will last. And we don't know if tariffs will broaden to other sectors. In the last two months, the US administration has twice imposed and then retracted universal tariffs on all imports from Canada and Mexico. President Trump has also threatened to extend tariffs to a wide range of industries, including autos, semi-conductors and pharmaceuticals. And he has repeatedly said new "reciprocal" tariffs are coming on April 2 on many countries, although what exactly this means is unclear.

"Most disturbing of all for Canadians, President Trump has threatened our sovereignty, repeatedly referring to Canada as the 51st state. There can be no question about our sovereignty or our border.

"Last month, I gave a speech about the effects of broad-based tariffs on the Canadian economy. Today I want to advance the discussion in three ways.

"First, I want to discuss what tariffs could mean for specific sectors-and specific regions-of the country.

"Second, I'll talk about the impacts of uncertainty caused by on-again, off-again tariffs and threats of more to come. Canadian businesses and households are doing their best to navigate the unpredictability of US policy, and that uncertainty is affecting our economy.

"Finally, I'll talk about how the Bank is navigating monetary policy in the face of unusual uncertainty. Monetary policy cannot solve a trade war. And we can't make the uncertainty go away. But we can make sure we don't add to it by ensuring inflation remains anchored on our 2% target. Canadians are worried about trade uncertainty. We don't want them to have to worry about inflation as well."