Tensions between Canada and the U.S. intensified last week when U.S. President Donald Trump said he is considering blocking the opening of the Gordie Howe International Bridge. He was unsatisfied with Canada’s relationship with the U.S., believing it benefits Canada at the expense of the U.S.

Later that day, Canadian Prime Minister Mark Carney said he spoke with President Trump and a solution was possible.

But trade tensions appeared to be at the heart of the issue with the bridge, along with who profits from it. A report from Bloomberg said President Trump is considering terminating the Canada-United States-Mexico Agreement (CUSMA). However, it appears Trump is willing to return to the negotiating table with Canada on trade.

The U.S. House of Representatives voted down President Trump’s use of emergency powers to impose tariffs on Canadian goods. The vote still requires Senate approval and must be approved by President Trump himself, which is making the removal of the tariffs unlikely.

Tensions between Canada and the U.S. persist. Trade remains unresolved, making the CUSMA review that much more important. In its Summary of Deliberations, the Bank of Canada said it was difficult to predict the direction of its monetary policy given policy and trade uncertainty, issues in Greenland and the threat to the independence of the U.S. Federal Reserve Board (Fed).

The U.S. economy added 130,000 jobs in January, topping economists’ expectations. This marked the largest number of job additions in a month since December 2024. Job gains were driven by a rise in jobs in the health care sector and the construction industry.

Largely in response, the U.S. unemployment rate declined to 4.3% in January from 4.4% in December.

Back in December, retail sales stalled as spending moderated after a strong start to the holiday season in November. Tight financial conditions appeared to weigh on U.S. consumers in December.

The annual inflation rate in the U.S. slowed to 2.4% in January from 2.7% in the previous month. January’s rate was lower than expected. The annual core inflation rate also moderated.

Data from Bloomberg as of February 13 show economists expect the Fed to hold the federal funds rate steady at its March meeting. Markets did raise bets on three interest rate cuts this year. The labour market appeared to stabilize in January, while inflationary pressures subsided. The Fed will have to decide whether its policy interest rate is at a suitable level given prevailing economic conditions.

The annual inflation rate in China slowed to 0.2% in January from 0.8% in December. Despite the slowdown, China has seen four straight months of rising consumer prices, easing mounting concerns about deflation.

The slowdown was driven by a drop in food prices, which declined by 0.7% year over year in January. Meanwhile, health care prices eased, while clothing prices accelerated.

Core inflation, which excludes more volatile items, was 0.8% year over year in January, which was the slowest pace since July 2024.

Producer prices declined on a year-over-year basis in January for the 40th straight month, falling by 1.4%.

China’s inflation rate continues to run at low levels, in large part due to soft domestic demand. The Chinese government continues to implement significant stimulus measures, hoping to boost demand.

Gross domestic product (GDP) in the U.K. expanded by 0.1% over the fourth quarter of 2025, according to a preliminary estimate.

This was in line with GDP growth in the third quarter of 2025.

A rise in production over the quarter contributed to growth but was partially offset by a slowdown in consumer-facing services. The U.K. consumer continues to be hindered by elevated inflation and still relatively high interest rates.

The U.K. economy expanded by 1.3% over 2025, which was up from the 1.1% rate of growth in 2024. Despite tariffs from the U.S., the U.K. was able to secure a trade deal with the U.S. relatively quickly, which helped ease economic uncertainty.

At its February meeting, the Bank of England (BoE) held its policy interest rate steady at 3.75%. However, the vote was again close, suggesting BoE officials are divided on the path of interest rates. The BoE is navigating through slow U.K. economic growth but elevated inflationary pressures.