Minneapolis Fed President Kashkari Warns Canada Tariff Dispute Could Extend U.S. Inflation

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, warned Sunday that prolonged tariff disputes with Canada could extend U.S. inflation pressures. Speaking on "Face the Nation with Margaret Brennan," Kashkari said: "The longer there's back and forth on the trade front, just like the longer there's back and forth in the conflict of Iran, the imprint and inflation end up being extended and delayed." The warning comes as the U.S. and Canada entered an open tariff conflict. On Saturday, the U.S. imposed 50% tariffs on Canadian products after negotiators failed to reach an agreement. U.S. Trade Representative Jamieson Greer said Saturday that no new planned talks with the Canadians were on the table. According to CBS News reporting, the tariffs are expected to target steel, dairy, appliances, agricultural equipment, pulp, paper, and electronics. Canada is the U.S. second-largest trading partner behind Mexico. The two countries sold 880 billion dollars worth of goods and services to one another in 2025. Kashkari outlined the U.S. current economic picture, pointing to five years of elevated inflation largely driven by supply shocks. He identified trade and tariff conflicts as one such supply shock. Kashkari also named the war with Iran as "a big driver of what's happening on inflation" due to energy's broad impact on the U.S. economy, and called the trade dynamic "another factor to pay close attention to." According to Kashkari, the path to inflation relief lies in reaching a "new normal" on the trade front. He stated: "And so to the extent that we can get to a new normal, a level of whatever the trade dynamic is going to be, once we can get to that steady state, then businesses can adjust, and the inflationary impact can fade into the background."