Latest news with #CUSMA
Toronto Star
2 hours ago
- Business
- Toronto Star
Here's what Canada's effective U.S. tariff rate might look like after the carve-outs
OTTAWA - When you peel back the many layers of tariffs and exemptions imposed by the United States, the effective tariff rate on Canada looks much lower than the headline figures suggest, some economists say. RBC senior economist Claire Fan said in an interview that the effective tariff rate is an average of the import duties paid on goods heading to the United States that accounts for exemptions tied to the Canada-U.S.-Mexico Agreement on trade, or CUSMA.
Yahoo
4 hours ago
- Business
- Yahoo
Canada could be trade winner as U.S. tariffs undershoot global competitors by wide margin, says report
The tariff rate imposed on Canadian exports by the United States is estimated to be the lowest amongst the world's trading countries, meaning that Canada could end up coming out ahead in Donald Trump's trade war, a new report says. Oxford Economics Group Ltd. estimates the U.S.'s current effective tariff rate on Canada is 2.5 per cent, placing it below Mexico at four per cent and well below other major U.S. trading partners. For example, the U.S. tariff rate is 35 per cent on China, 15 per cent on Japan, 13 per cent on South Korea and eight per cent on the United Kingdom and the European Union, based on data from calculated duties as a share of imports, Oxford said. 'If the relatively low tariffs apparently being paid on imports from Mexico and Canada persist, these two economies could pick up some benefits from shifts in supply chains, although uncertainties over the endgame for tariffs and the future of the (Canada-United States-Mexico Agreement) will be near-term drags,' Adam Slater, lead economist at Oxford Economics, said in the report. CUSMA-compliant goods escape U.S. tariffs, though the trade agreement is scheduled to be reviewed in July 2026, but some people, including Ontario Premier Doug Ford, think that deadline could be accelerated. The review also starts the clock ticking on the possible expiration of the agreement in 2036. Still, Slater described the current estimates for the tariff rates 'as something of a puzzle.' One set of trade data from the U.S. Census Bureau — specifically labelled CUSMA — indicates that 56 per cent of goods entering the U.S. from Canada and 47 per cent from Mexico are compliant with the agreement. Other Census Bureau data, based on rate provisions, suggests that 91 per cent and 84 per cent, respectively, are entering duty-free, though Oxford said it can't tell if that is due to CUSMA compliance or 'some other exemption.' 'It may be the case that tariff exemptions for these economies are broader than assumed,' Slater said. Slater said Oxford based its overall 2.5 per cent tariff rate for Canada on a higher level of CUSMA compliance, 'while not directly' adhering to the 91 per cent level. But trade between the U.S. and Canada hasn't escaped unscathed. 'The biggest negative impacts have been in Canada, where imports are down 25 per cent from January levels, and in China, where imports are down 50 per cent from January,' Slater said, adding that 'Chinese data on exports to the U.S. shows a much less dramatic decline of around 25 per cent since January,' possibly due to rerouting of goods through other countries. In Canada, 50 per cent tariffs on aluminum and steel exports to the U.S. persist, as do 25 per cent tariffs on the non-U.S. components of vehicles. Trump also recently hiked the tariff on non-CUSMA-compliant goods to 35 per cent from 25 per cent and announced an increased tariff on softwood lumber to 35 per cent. Oxford's report also warned that overall global trade is shrinking. 'A variety of indicators suggest that world trade is weakening,' Slater said, referencing various measures that indicated monthly global imports slowed three per cent in April and May, while an International Monetary Fund port tracker said growth in international exports declined to less than one per cent. 'Other sea and air freight indicators show similar trends,' he said. Oxford is estimating that world trade volumes shrunk by about three per cent from the second quarter to the first quarter of 2026, with world trade posting its weakest performance in a four-year period since the recession of the early 1980s. Canadian steelmakers need to focus on domestic market as tariffs lock them out of U.S.: Algoma CEO Trump put a tariff on gold — or did he? What you need to know about the bullion confusion It reduced its global gross domestic product estimate to 2.5 per cent — 'historically on the low side' — to 2.8 per cent from 2.9 per cent at the beginning of the year, Slater said. • Email: gmvsuhanic@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Toronto Star
5 hours ago
- Business
- Toronto Star
Here's where Canada's effective U.S. tariff rate might stand after the carve-outs
OTTAWA - When you peel back the many layers of tariffs and exemptions imposed by United States, the effective tariff rate on Canada looks much lower than the headline figures suggest, some economists say. RBC senior economist Claire Fan said in an interview that the effective tariff rate is an average of the import duties paid on goods heading to the United States that accounts for exemptions tied to the Canada-U.S.-Mexico Agreement on trade, or CUSMA.
Toronto Sun
9 hours ago
- Business
- Toronto Sun
CHARLEBOIS: How federal policy is canning Canadian choice
The Bick's case highlights a broader reality: Canada's food supply chains are structurally less flexible than those in the U.S. A jar of Bick's Pickles in Dunnville. Photo by MATT DAY / Postmedia Since June, Bick's pickles have been disappearing from some Canadian grocery shelves, caught in the crossfire of a tariff dispute that is exposing deep flaws in Ottawa's trade strategy. The story of Bick's is a telling case study in how well-intentioned policies can backfire, punishing consumers and domestic suppliers alike. This advertisement has not loaded yet, but your article continues below. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. SUBSCRIBE TO UNLOCK MORE ARTICLES Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. REGISTER / SIGN IN TO UNLOCK MORE ARTICLES Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account. Share your thoughts and join the conversation in the comments. Enjoy additional articles per month. Get email updates from your favourite authors. THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors Don't have an account? Create Account Bick's was acquired by Smucker's in 2011, and its Toronto production facility was shuttered soon after. Today, the brand is owned by TreeHouse Foods and manufactured in the United States. While the brand is no longer fully Canadian, parts of its supply chain remain here. The company still sources cucumbers from Canadian growers and lids from Canadian manufacturers. Under CUSMA, these raw cucumbers can cross into the U.S. without tariffs. Yet, once they are processed and jarred in U.S. plants, those same Canadian cucumbers return to Canada as Bick's pickles — now subject to Canadian counter-tariffs. Other inputs sourced internationally for the U.S. facility may also be tariffed, further pushing up costs. Your noon-hour look at what's happening in Toronto and beyond. By signing up you consent to receive the above newsletter from Postmedia Network Inc. Please try again This advertisement has not loaded yet, but your article continues below. The economic outcome is predictable. Margins in grocery retail are razor-thin, often between 2 and 4%. Retailers cannot absorb steep cost increases without passing them along to consumers, and in some cases, they simply drop the product altogether. Sobeys appears to be the first major grocer to delist Bick's, though it is unlikely to be the last. Counter-tariffs, often framed as a patriotic defence of domestic producers, can instead reduce competition, shrink consumer choice, and push retail prices higher. In practice, Sobeys has shifted shelf space to its own private-label pickles, which are often imported and carry higher profit margins. Ironically, the result is a product category that is now even less Canadian. This advertisement has not loaded yet, but your article continues below. The policy flaw is glaring. Canada is effectively taxing products made with Canadian cucumbers and Canadian lids solely because they were processed across the border. This is not a protection strategy — it is an economic own goal. It illustrates how tariff structures can penalize integrated North American supply chains and undermine the competitiveness of Canadian companies. Some may argue that TreeHouse should reopen a plant in Canada, but the economics of food processing make little sense for the company to shift production north. In reality, they may simply abandon the Canadian market altogether — a withdrawal that would further reduce competition and highlight Canada's weaker position compared to the United States, a market of nearly 400 million affluent consumers. This advertisement has not loaded yet, but your article continues below. The Bick's case also highlights a broader reality: Canada's food supply chains are structurally less flexible than those in the United States. When faced with tariffs or disruptions, American importers of Canadian goods can pivot quickly to alternative suppliers. Canadian importers, constrained by scale and options, have far less room to manoeuvre. The result is that even tariff-exempt Canadian products can lose shelf space and market share to foreign alternatives. If Canada wants to avoid repeating this scenario, it needs to rethink its approach. Tariff policy should account for Canadian content and the realities of integrated cross-border supply chains. A jar of pickles made mostly from Canadian inputs should not be treated as a foreign product simply because final processing occurred in the United States. More importantly, Canada must reverse decades of decline in domestic food manufacturing. Without renewed investment in processing capacity, these vulnerabilities will only grow. This advertisement has not loaded yet, but your article continues below. The Bick's episode is not an isolated case — it is an early warning signal. Without a recalibration of trade and tariff policy, more products will quietly disappear from Canadian shelves, replaced by less Canadian alternatives, and consumers will pay more for the privilege. The federal government may believe its counter-tariff strategy sends a message to Washington, but the message reaching Canadian households is far different: Fewer choices, higher prices, and less Canada in the Canadian grocery cart. — Sylvain Charlebois is director of the Agri-Food Analytics Lab at Dalhousie University, co-host of The Food Professor Podcast and visiting scholar at McGill University. Columnists Opinion Weird World Toronto & GTA
Vancouver Sun
9 hours ago
- Business
- Vancouver Sun
Canada could be trade winner as U.S. tariffs undershoot global competitors by wide margin, says report
The tariff rate imposed on Canadian exports by the United States is estimated to be the lowest amongst the world's trading countries, meaning that Canada could end up coming out ahead in Donald Trump 's trade war , a new report says. Oxford Economics Group Ltd. estimates the U.S.'s current effective tariff rate on Canada is 2.5 per cent, placing it below Mexico at four per cent and well below other major U.S. trading partners. For example, the U.S. tariff rate is 35 per cent on China, 15 per cent on Japan, 13 per cent on South Korea and eight per cent on the United Kingdom and the European Union, based on data from calculated duties as a share of imports, Oxford said. Start your day with a roundup of B.C.-focused news and opinion. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Sunrise will soon be in your inbox. Please try again Interested in more newsletters? Browse here. 'If the relatively low tariffs apparently being paid on imports from Mexico and Canada persist, these two economies could pick up some benefits from shifts in supply chains, although uncertainties over the endgame for tariffs and the future of the ( Canada-United States-Mexico Agreement ) will be near-term drags,' Adam Slater, lead economist at Oxford Economics, said in the report. CUSMA-compliant goods escape U.S. tariffs, though the trade agreement is scheduled to be reviewed in July 2026, but some people, including Ontario Premier Doug Ford, think that deadline could be accelerated. Still, Slater described the current estimates for the tariff rates 'as something of a puzzle.' One set of trade data from the U.S. Census Bureau indicates that 56 per cent of goods entering the U.S. from Canada and 47 per cent from Mexico are compliant with CUSMA, while other Census Bureau data suggests the rates are 91 per cent and 84 per cent, respectively. 'It may be the case that tariff exemptions for these economies are broader than assumed,' Slater said. Slater said Oxford based its overall 2.5 per cent tariff rate for Canada on a higher level of CUSMA compliance, 'while not directly' adhering to the 91 per cent level. But trade between the U.S. and Canada hasn't escaped unscathed. 'The biggest negative impacts have been in Canada, where imports are down 25 per cent from January levels, and in China, where imports are down 50 per cent from January,' Slater said, adding that 'Chinese data on exports to the U.S. shows a much less dramatic decline of around 25 per cent since January,' possibly due to rerouting of goods through other countries. In Canada, 50 per cent tariffs on aluminum and steel exports to the U.S. persist, as do 25 per cent tariffs on the non-U.S. components of vehicles. Trump also recently hiked the tariff on non-CUSMA-compliant goods to 35 per cent from 25 per cent and announced an increased tariff on softwood lumber to 35 per cent. Oxford's report also warned that overall global trade is shrinking. 'A variety of indicators suggest that world trade is weakening,' Slater said, referencing various measures that indicated monthly global imports slowed three per cent in April and May, while an International Monetary Fund port tracker said growth in international exports declined to less than one per cent. 'Other sea and air freight indicators show similar trends,' he said. Oxford is estimating that world trade volumes shrunk by about three per cent from the second quarter to the first quarter of 2026, with world trade posting its weakest performance in a four-year period since the recession of the early 1980s. It reduced its global gross domestic product estimate to 2.5 per cent — 'historically on the low side' — to 2.8 per cent from 2.9 per cent at the beginning of the year, Slater said. • Email: gmvsuhanic@
