The Bank of Canada on Wednesday trimmed its key policy rate by 25 basis points to 3%, cut growth forecasts and warned Canadians that a tariff war triggered by the United States could cause major economic damage.

Bank of Canada governor Tiff Macklem said following Wednesday's announcement that there is not much central bankers can do to offset the economic consequences of a trade war.

The Bank of Canada is likely to cut interest rates by a quarter percentage point on Wednesday as officials lay out their analysis of how US tariffs might derail a soft landing for the Canadian economy.