Recent developments in international trade have significant implications for Canada's economy. Trump has announced a 25% tariff on Canadian goods, effective as of Tuesday. These tariffs are expected to increase costs for consumers and businesses, affecting various sectors. In response to the U.S. tariffs on Canadian goods, Canada has announced its own set of retaliatory tariffs. Prime Minister Justin Trudeau declared a 25% tariff on various U.S. products, including lumber, plastics, vegetables, and consumer goods such as alcohol, appliances, and furniture. These measures aim to counteract the economic impact of the U.S. tariffs and protect Canadian industries.

In response to potential economic slowdowns, traders are anticipating an emergency rate cut by the Bank of Canada to mitigate the impact of these tariffs. The Bank has already reduced its policy rate by 25 basis points to 3% as of January 29, 2025, with further cuts possible depending on economic conditions.

The escalating trade tensions have led to increased economic uncertainty, prompting calls within Canada for emergency interest rate cuts to mitigate potential negative effects on the economy. Lowering interest rates could help stimulate economic activity by making borrowing more affordable for businesses and consumers, thereby offsetting some of the challenges posed by the tariffs.

These economic shifts may influence the housing market in Kelowna. Potential sellers might consider listing their properties before possible interest rate cuts, which could increase buyer demand. Conversely, prospective buyers may find upcoming rate reductions beneficial, potentially easing mortgage costs. Staying informed about these developments is crucial for making strategic real estate decisions in the current market, and at this time it is too early to say whether these tariffs will be here to stay, or what the direct implications will be.

As the situation develops, Canadian policymakers are closely monitoring the economic indicators to determine the appropriate monetary policy response to support the nation's economic stability.

As proud Canadians in Kelowna, we will be supporting local and national products as much as possible, and encourage you and your family to do the same! Read below to get some ideas for supporting local and national brands and industries:

1. Canadian Lumber & Wood Products

With tariffs targeting Canada’s forestry sector, choosing Canadian-made wood furniture, decking, and construction materials supports local businesses. Companies like West Fraser Timber and Canfor are major players in BC’s economy, and purchasing their products helps sustain the industry.

2. BC-Grown Produce & Agriculture

Canada’s agricultural exports, including vegetables and processed food products, are also subject to tariffs. Shopping locally at farmers’ markets or choosing BC-grown fruits, vegetables, and dairy products keeps money within the province. Look for Okanagan-grown apples, cherries, and wine grapes to support local farmers. During this time, supporting Mexican and other fruit and veggie importers will help support these countries as well. 

3. Canadian Wine & Spirits

With tariffs now affecting alcohol imports, supporting BC wineries, craft breweries, and distilleries is more important than ever. Opt for wines from Mission Hill, CedarCreek, or Tantalus, or grab a craft beer from BNA Brewing, Vice & Virtue, or Red Bird Brewing to support the local beverage industry. Doug Ford in Ontario has also said that US liquor will be expected to be off the shelves in Ontario. 

4. Homegrown Consumer Goods

Imported household appliances and furniture are also facing increased costs due to tariffs. Instead of purchasing U.S. brands, consider high-quality Canadian furniture brands like EQ3 or appliances from companies like Blomberg Canada.

5. Locally Made Clothing & Outdoor Gear

Brands like Arc’teryx, Roots, and Canada Goose produce high-quality apparel while supporting Canadian workers. Given BC’s active outdoor lifestyle, investing in Canadian-made hiking gear, ski equipment, and activewear helps sustain domestic production. Smaller local brands will also need your help! Check out farmers markets and pay attention to social media to look for local businesses to support. 

By choosing Canadian, you’re not just making a purchase—you’re investing in local businesses, jobs, and communities. Keep an eye on shifting market conditions and explore how these economic shifts could create opportunities in Kelowna’s real estate market.

Sources: bloomberg.com , bankofcanada.ca , reuters.com