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CBC
7 hours ago
- CBC
Why Trump's deals with the EU, Japan may not be templates for Canada in trade talks
Social Sharing U.S. President Donald Trump's successive announcements of deals setting baseline tariffs on the European Union and Japan are prompting questions about whether they're a road map for Canada to follow in trade talks. Trump and European Commission President Ursula von der Leyen described the bones of an agreement on Sunday. It sets across-the-board tariffs of 15 per cent on most European Union exports to the United States, along with a commitment by Europe to invest $600 billion US in the American economy and spend $750 billion on U.S. energy products — although there's plenty of fine print still to come. That makes it broadly comparable to the deal Trump announced last week with Japan: a 15 per cent across-the-board tariff and a Japanese commitment to invest $550 billion in the U.S. Trump was threatening to hit Europe with 30 per cent baseline tariffs and Japan with 25 per cent on Aug. 1, so both trading blocs are selling the deals as wins. Because Canada is facing the threat of 35 per cent tariffs on some goods on the same date, does that mean Canada should be aiming for a similar agreement? Prime Minister Mark Carney certainly isn't saying so. Asked whether any forthcoming deal will be "in the ballpark" of those 15 per cent baseline tariffs, he emphasized the differences between Europe's and Canada's trading relationship with the U.S. "We are in a different position, and that is why these negotiations ... are different," Carney said on Monday, citing Canada's geographical closeness and energy exports to the U.S. "Europe, in that agreement yesterday, made commitments to buy American energy," he said at a news conference in Prince Edward Island. "America needs Canadian energy." WATCH | Canada's trade talks with the U.S. are different from Europe's, Carney says: Carney says Canada is 'in a different position' than EU on trade deal with U.S. 15 hours ago Across-the-board tariffs 'difficult for Canada to accept' There are plenty of reasons why a 15 per cent baseline tariff rate is not something for Canada to aspire to, given that its economy is proportionally far more dependent on the U.S. market than Europe's and Japan's are. Jonathan O'Hara, an international trade lawyer in the Ottawa law office of McMillan LLP, said Canada should set its sights on a better deal than the EU or Japan negotiated since it's already so tightly integrated with the American economy. "On a broad level, having some kind of across-the-board tariffs, I think, would be very difficult for Canada to accept," O'Hara said in a weekend interview with CBC News. WATCH | Here's what's in Trump's tariff deal with the EU: Trump, EU reach trade deal framework 1 day ago Yet it appears that Canada doesn't actually face the prospect of tariffs that are truly across-the-board. That's because it has something that neither the European Union nor Japan have: an actual free-trade deal. Trump's "fentanyl emergency" tariffs, currently set at 25 per cent — which he's threatening to raise to 35 per cent on Friday — hit only those goods that don't comply with the rules of origin in the Canada-U.S.-Mexico Agreement (CUSMA). That means the vast bulk of Canada's exports to the U.S. are currently crossing the border tariff-free. Steel and aluminum tariffs a big question That may be why Carney's Liberal government does not feel the same sort of pressure as Europe and Japan to get a deal on Trump's timeline, said Drew Fagan, a professor at the University of Toronto's Munk School of Global Affairs and Public Policy. "Overall, the average tariff on Canadian goods going into the United States is about as low as any place in the world," he told CBC News. "What's important for us is that the [CUSMA] free-trade agreement continues to hold. Whether it will in the future, of course, is a fundamental question." The biggest exceptions to Canada's mostly tariff-free access to the U.S. are steel and aluminum, hit by Trump's 50 per cent global rate as he tries to prop up that sector at home. In their deals reached with the U.S., neither the EU nor Japan are let off the hook from that tariff. While Canada is surely angling for something better on steel and aluminum — such as the U.K.'s 25 per cent tariff, potentially headed to zero — the European and Japanese agreements suggest that will be tough to achieve. Carlo Dade, director of international policy at the University of Calgary's School of Public Policy, said Canada will likely face a tariff rate comparable to Europe's. "The Americans have decided to readjust the terms of trade," Dade said. "The price of access to the U.S. market is going up globally. It appears everyone is going to have to pay an increased cost." There are plenty of signs to suggest that the prospects are slim for Canada to reach a deal by Trump's deadline of Friday: Carney said the talks are complex, his top trade negotiators are downplaying the importance of the deadline and Trump himself is saying there may not be a deal at all.
CTV News
19 hours ago
- CTV News
Heineken shares slide as tariff uncertainties spook investors
FILE - Bottles of Heineken beer are photographed in Washington, USA, March 30, 2018. Dutch brewer Heineken has completed its withdrawal from Russia, 18 months after Moscow launched its full-scale invasion of Ukraine, selling its business in Russia for just 1 euro, the company announced Friday, Aug. 25, 2023. (AP Photo/J. David Ake, FILE) LONDON — Dutch brewer Heineken's shares slid over 8 per cent on Monday as a forecast-beating profit rise was eclipsed by investor worries over second-half profits and volumes, which Heineken warned may be softer as tariffs weigh on confidence. The world's No.2 brewer welcomed a trade deal struck between the European Union and the United States and said on Monday that it was weighing all options to deal with growing tariff challenges in the long term, including shifting manufacturing. Its shares closed down 8.45 per cent despite a 7.4 per cent rise in first-half profit, above analyst estimates, for which it credited growth in once-difficult regions like Africa and Asia as well as cost savings. Beer sales volumes, however, dipped 1.2 per cent. Analysts and investors pointed to Heineken's warning that volumes would be softer than expected for the remainder of the year as U.S. President Donald Trump's trade salvos disrupt markets in the Americas. A price dispute with retailers meanwhile dented sales in Europe. The company exports beer, especially its namesake lager, to the U.S. from Europe and Mexico, and has also suffered from the indirect impact on consumer confidence in key markets like Brazil. CEO Dolf van den Brink welcomed the certainty brought by the trade deal clinched on Sunday, which reduced a threatened 30 per cent U.S. tariff on EU goods to 15 per cent - a rate that would still hit Heineken's U.S. profits. While some in the industry, such as spirits makers, are hopeful for an exemption, this does not appear to be a prospect for beer. All options are being considered to mitigate tariffs long-term, including shifting manufacturing, he said, but added that such moves were capital intensive and would first need more consistency in policy. 'We look at all options from ... continuing with our current setup, a more hybrid version, or otherwise,' he told journalists on a call. 'If and when we deem them financially to be more attractive in the mid- to long-term, we would for sure explore them.' LINGERING TARIFF FEARS, ECONOMIC UNCERTAINTY Heineken still faces U.S. tariffs of up to 30 per cent on products it produces in Mexico unless the Mexican government can reach an agreement with Washington ahead of an August 1 deadline. Executives told journalists that since the first quarter, Heineken has also seen economic uncertainty hit spending and confidence in the U.S., Brazil and Mexico. In Mexico, remittances from the U.S. have fallen significantly, impacting beer industry sales. And U.S. Hispanic consumers were also spending less, van den Brink said. Heineken continues to expect annual profit growth of between 4 per cent and 8 per cent. The company also beat forecasts for second quarter revenue and volume, with growth in markets like Vietnam and India, and increased an annual cost-saving goal by a quarter to 500 million euros ($586 million). 'They have slightly downgraded their volume guidance,' said Ryann Dean, global analyst at Heineken investor Aylett Fund Managers. 'Given everything going on in the world... that to me doesn't feel like a terrible outcome.' Heineken's strong growth in markets like India and China, and consistent profitability, more than offset this, he continued, adding that emerging markets would drive Heineken's long-term volume growth. Brokerage Jefferies also expressed surprise at the sharp share price fall, which it said was down to worries over softer sales and slower second-half profit growth. 'This represents an attractive buying opportunity in our view, given volume reassurance and profit delivery underpinned by delivery on the cost program,' it said in a note. (Reporting by Emma Rumney; Editing by Lincoln Feast and Joe Bavier, Kirsten Donovan and Nick Zieminski)
CTV News
21 hours ago
- CTV News
Reid: Trump's E.U. deal shows Canada isn't a priority in trade talks
Watch Political Commentator Scott Reid on how Trump's new trade deal with the European Union impacts talks between Canada and the U.S. ahead of the August 1 deadline.
