North America’s two largest economies moved in opposite directions last quarter, with the United States posting stronger-than-expected growth while Canada suffered its deepest contraction since the pandemic. The divergence underscores the impact of Washington’s tariff policy on its northern neighbour and adds pressure on Ottawa and the Bank of Canada to shore up activity. Revised government figures showed U.S. gross domestic product expanding at a 3.3% annualised rate in the April-to-June period, topping the 3.1% consensus forecast and exceeding the initial 3.0% estimate. The second-quarter pickup points to resilient consumer and business spending despite higher borrowing costs. Statistics Canada reported that Canadian real GDP fell 1.6% annualised in the same quarter, far weaker than the 0.7% decline economists projected and the first quarterly drop in nearly two years. Output slipped 0.1% in June, capping three straight monthly declines, and year-over-year growth slowed to 0.9%. The agency blamed a 7.5% slide in exports after new U.S. levies on steel, aluminum and autos. Shipments of passenger cars and light trucks plunged 24.7%, and business investment in machinery and equipment fell 9.4%. Analysts say the sharp slowdown increases the likelihood that the Bank of Canada, which has held its policy rate at 2.75% for three meetings, could deliver a cut at its September decision.