The Globe and Mail reports in its Saturday, Aug. 30, edition that the Canadian economy contracted 1.6 per cent in the second quarter, marking its first decline in nearly two years, largely due to trade tensions with the U.S. The Globe's Mark Rendell writes that this result aligned with the Bank of Canada's forecast but fell short of the 0.6-per-cent decline anticipated by analysts. Following the report, financial markets increased expectations for a rate cut from the BOC next month, with a 50-per-cent chance, up from 40 per cent, of a quarter-point cut on Sept. 17. The second quarter saw a significant 26.8-per-cent annualized decline in exports, largely due to U.S. tariffs under President Donald Trump, with automobiles and industrial machinery especially affected. Imports also fell by 5.1 per cent. The trade war's uncertainty led to a 10.1-per-cent drop in business investment, the worst since 2016, excluding the COVID-19 pandemic. This data highlights the negative impact of Mr. Trump's tariffs on Canada's export-driven economy. CIBC economist Andrew Grantham said, "The second quarter was always expected to be negative given the slump seen in exports, the only question remaining was the magnitude of the decline."