The Bank of Canada will likely cut its benchmark rate by a quarter point on Wednesday to cushion the economy against U.S. tariffs, several economists said.

Warning of an economic downturn due to the burgeoning trade war between Canada and the U.S., the Bank of Canada dropped its key interest rate a quarter-point to 2.75 per cent on Wednesday. The rate cut came on the day President Donald Trump’s tariffs on Canadian steel and aluminum were set to take effect.

The Bank of Canada lowered its benchmark interest rate by a quarter point on Wednesday as the tariff battle with the United States starts to weigh on the Canadian economy.