Canada Hits Back at Trump Tariffs, Handing Carney a Poll Bounce
Canada has slapped retaliatory tariffs of 15% to 50% on roughly $20bn of US goods, doubling levies on American steel, aluminium and iron to 50% and targeting furniture, clothing, appliances and dairy. The move answers Trump's 50% tariffs on Canadian imports after summer trade talks collapsed. The hit could shave 0.3 to 0.4 percentage points off Canadian GDP over a year, cushioned by Western Canadian Select crude climbing from around $50 to $80 a barrel since the strikes on Iran. Prime Minister Mark Carney's Liberals now lead the Conservatives 47% to 31%, with 90%+ of non-conservative voters backing the counter-tariffs.
Global Test Scores Post Worst Decade on Record
The OECD's latest PISA assessment shows average reading scores among 15-year-olds have fallen 28 points over the past decade, with maths down 22 and science down 10 - all record lows across more than 90 countries. Daily AI users scored 28 points below non-users, equivalent to roughly 18 months of lost schooling. US reading hit its lowest score ever, and the gap between top and bottom American students in science stretched to nearly 300 points.
US Interest Bill Tops Defence as Debt Passes $40tn
US federal interest payments have climbed to roughly $1.25tn a year, about a fifth of government revenue and more than the defence budget. National debt has crossed $40tn as the annual deficit runs near $2tn, pushing long-dated Treasury yields higher as investors demand more to hold the paper. The Congressional Budget Office projects net interest costs will double over the next decade.
Canada-EU Pact in the Works as Trade Pivots From US
Ottawa is in talks with Brussels on a deeper integration deal short of EU membership, as Carney travels to Europe next week. The US share of Canadian exports has slipped from around 80% to 67% in recent years, with businesses treating any future US deal as written in pencil. A shift in defence procurement, including the long-debated F-35 order, could follow.