Traders of Canadian short-term interest rates have begun to price in meaningful odds of an emergency cut by the Bank of Canada to blunt the economic impact of tariffs the US said will take effect Tuesday.

U.S. President Donald Trump’s tariffs would push Canada’s economy into a recession and cause unemployment to surge, BMO’s chief economist said in a research note, likely pushing the Bank of Canada to cut its benchmark interest rate at its next six meetings through October.

The Bank of Canada is expected to lower its key interest rate by 25 basis points on Wednesday, as mounting trade tensions and political uncertainty weigh on the country’s economic outlook. With potential US tariffs on Canadian goods looming and both federal and provincial elections on the horizon,