Latest news with #CUSMA
Vancouver Sun
19 hours ago
- Business
- Vancouver Sun
Bank of Canada holds interest rate at 2.75% again as 'uncertainty remains high'
The Bank of Canada decided to hold its interest rate on Wednesday, saying uncertainty remains high and it will continue to assess the impact of U.S. tariffs on the economy. 'The Canadian economy is softer but not sharply weaker. And we've seen some firmness in recent inflation data,' said Bank of Canada governor Tiff Macklem , in prepared remarks in Ottawa. 'Against this backdrop, we decided to hold the policy rate unchanged as we continue to gain more information on U.S. trade policy and its impacts.' Macklem added that the trade conflict with the United States remains 'the biggest headwind facing the Canadian economy.' 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. On Tuesday, U.S. President Donald Trump signed an executive order doubling tariffs on steel and aluminum from 25 per cent to 50 per cent, with the levies taking effect on Wednesday. Tariffs on Canadian autos, energy and other goods remain in place, although many items are exempted under the Canada–United States–Mexico Agreement (CUSMA) . Trade and security negotiations between the U.S. administration and the Canadian government are ongoing. On Wednesday, Macklem singled out inflation in the decision. Headline inflation was 1.7 per cent in April but, excluding the removal of the carbon tax, came in higher than expected at 2.3 per cent. Core inflation — the central bank's preferred measure when making its monetary policy decisions — also heated up. 'There is some unusual volatility in inflation, but these measures suggest underlying inflation could be firmer than we thought,' said Macklem. 'Higher core inflation can be partly attributed to higher goods prices, including food, and may reflect effects of trade disruption.' The central bank said it will continue to monitor how inflationary pressures are evolving, as its recent survey data indicated businesses intend to pass the higher tariff costs onto consumers. Growth in the first quarter was also above central bank's expectations, with gross domestic product rising 2.2 per cent. Growth at the beginning of the year was boosted by a surge in Canadian exports to the United States, as businesses raced to beat Trump's tariffs. The central bank expects growth to be considerably weaker in the second quarter. 'Exports and inventories were strong but final domestic demand was roughly flat,' said Macklem. 'Consumer spending slowed from a very strong fourth-quarter pace, but continued to grow despite a sharp drop in consumer confidence.' The labour market deteriorated in April, with the unemployment rate climbing to 6.9 per cent. This was due to a a drop in employment in trade-intensive sectors such as manufacturing. 'So far, employment has held up across sectors that are less exposed to trade,' said Macklem. 'But businesses are generally telling us that they plan scale back hiring.' While the governor said there was a clear consensus to hold the policy rate Wednesday, there was a 'diversity of views' among the seven members of the governing council for the path forward for interest rates. 'On balance, members thought there could be a need for a reduction in the policy rate if the economy weakens in the face of continued U.S. tariffs and uncertainty, and cost pressures on inflation are contained,' said Macklem. 'Faced with unusual uncertainty, governing council is proceeding carefully, with particular attention to the risks.' • Email: jgowling@ Bookmark our website and support our journalism: Don't miss the business news you need to know — add to your bookmarks and sign up for our newsletters here .
Calgary Herald
19 hours ago
- Business
- Calgary Herald
Bank of Canada holds interest rate at 2.75% again as 'uncertainty remains high'
Article content The Bank of Canada decided to hold its interest rate on Wednesday, saying uncertainty remains high and it will continue to assess the impact of U.S. tariffs on the economy. Article content 'The Canadian economy is softer but not sharply weaker. And we've seen some firmness in recent inflation data,' said Bank of Canada governor Tiff Macklem, in prepared remarks in Ottawa. Article content 'Against this backdrop, we decided to hold the policy rate unchanged as we continue to gain more information on U.S. trade policy and its impacts.' Article content Article content Article content On Tuesday, U.S. President Donald Trump signed an executive order doubling tariffs on steel and aluminum from 25 per cent to 50 per cent, with the levies taking effect on Wednesday. Tariffs on Canadian autos, energy and other goods remain in place, although many items are exempted under the Canada–United States–Mexico Agreement (CUSMA). Trade and security negotiations between the U.S. administration and the Canadian government are ongoing. Article content On Wednesday, Macklem singled out inflation in the decision. Headline inflation was 1.7 per cent in April but, excluding the removal of the carbon tax, came in higher than expected at 2.3 per cent. Core inflation — the central bank's preferred measure when making its monetary policy decisions — also heated up. Article content Article content 'There is some unusual volatility in inflation, but these measures suggest underlying inflation could be firmer than we thought,' said Macklem. 'Higher core inflation can be partly attributed to higher goods prices, including food, and may reflect effects of trade disruption.' Article content Growth in the first quarter was also above central bank's expectations, with gross domestic product rising 2.2 per cent. Growth at the beginning of the year was boosted by a surge in Canadian exports to the United States, as businesses raced to beat Trump's tariffs. The central bank expects growth to be considerably weaker in the second quarter.
Cision Canada
20 hours ago
- Business
- Cision Canada
Unifor calls for immediate Canadian countermeasures and investment protections as U.S. doubles steel and aluminum tariffs
TORONTO, June 4, 2025 /CNW/ - The decision by U.S. President Donald Trump to double tariffs on Canadian steel and aluminum imports to 50% is a direct threat to Canadian jobs and economic stability. Unifor is urging the federal government to act without delay to defend Canada's manufacturing sector and counter the escalating trade assault. "These tariffs are killing investment in our steel, aluminum, and auto sectors, and we are already seeing the consequences in lost jobs and economic instability," said Unifor National President Lana Payne. "We need immediate and forceful action to defend good jobs and safeguard our national economic security." The 50% tariff, which came into effect today, doubles the previous 25% duty imposed on Canadian steel and aluminum imports since March 2025. Canada remains the largest supplier of both steel and aluminum to the United States. The U.S. imports approximately a quarter of its steel from Canadian suppliers, while half of all U.S. aluminum consumption originates from Canada. "These tariffs are a direct blow to aluminum workers in Quebec and across Canada," said Unifor Quebec Director Daniel Cloutier. "They threaten good union jobs and destabilize an industry that plays a critical role in the North American economy. By doubling tariffs on both aluminum and steel, the U.S. is undermining the reliable, high-quality supply it depends on from Canadian workers." These measures are part of Trump's ongoing misuse of Section 232 of the U.S. Trade Expansion Act, using national security justifications to impose punitive trade barriers. The increased metal tariffs follow the April 2 introduction of a 25% U.S. tariff on all vehicles manufactured outside the United States, including those made in Canada—despite a deeply integrated automotive supply chain and the near-balanced trade relationship between the two countries. This move directly violates both the spirit and letter of the CUSMA agreement and its automotive side letters. An additional 25% tariff remains in place based on unsubstantiated border and fentanyl claims. The cumulative effect is wreaking havoc on integrated supply chains, discouraging investment, and threatening jobs in Canada's steel, aluminum, automotive industries and other manufacturing industries. Soaring metal costs will drive up the price of cars, airplanes, and critical infrastructure, while putting thousands of jobs at risk and dealing a serious blow to manufacturing competitiveness on both sides of the border. Unifor is calling on the federal government to respond with urgency by: Enacting immediate retaliatory tariffs on U.S. steel and aluminum to match the 50% rate; Implementing new border measures to prevent unfairly traded or dumped foreign steel and aluminum from entering Canada; Temporarily halting exports of strategic metals to the U.S. and building a national stockpile reserve; Strengthening the Foreign Extraterritorial Measures Act (FEMA) to block companies from relocating Canadian jobs in response to U.S. pressure. "President Trump fails to understand the chaos and damage these tariffs will inflict on workers and consumers in both Canada and the U.S.," added Payne. "This is about economic sovereignty. Canada must respond with strength and urgency." Unifor warns that further threats by Trump to target aerospace, softwood lumber, energy, pharmaceuticals, microchips, copper, and Canada's film and entertainment sectors demonstrate the need for a broad-based industrial and trade defense strategy. "This is a defining moment," said Payne. "If we don't defend our industries now, we risk losing them for good." Unifor is Canada's largest union in the private sector, representing 320,000 workers in every major area of the economy. The union advocates for all working people and their rights, fights for equality and social justice in Canada and abroad, and strives to create progressive change for a better future.
Hamilton Spectator
a day ago
- Business
- Hamilton Spectator
Trump signs order to double tariffs on steel, aluminum Wednesday
WASHINGTON - U.S. President Donald Trump has signed an executive order that will double steel and aluminum tariffs on Wednesday as Canadian officials say they're still hoping for a good outcome from meetings in Washington. In March, Trump imposed 25 per cent tariffs on steel and aluminum imports to the United States. Trump announced his intention to increase the duties to 50 per cent at a steel plant on Friday. When asked whether there would be exemptions during Tuesday's media briefing, White House press secretary Karoline Leavitt said Trump 'made that announcement in Pennsylvania and he plans to deliver on that promise to Pennsylvania.' The increase doesn't apply to imports from the United Kingdom, which remain at 25 per cent while the Trump administration continues to work out details of a trade deal announced last month. Canada is the largest steel supplier to the United States, accounting for nearly 25 per cent of all imports in 2023. About a quarter of all steel used in America is imported. Canadian industries have said the tariffs will have a devastating impact and have called on Ottawa to provide support. 'Canada's position is that these tariffs are not justified,' said Kirsten Hillman, the Canadian ambassador to the United States. Despite the higher duties that will hammer Canada's steel and aluminum industry, Hillman and Canada-U.S. Trade Minister Dominic LeBlanc said they were optimistic following a meeting with U.S. Commerce Secretary Howard Lutnick on Tuesday afternoon. 'Every time we have these conversations, I think we deepen our understanding of each other's positions,' LeBlanc said. 'And I'm hopeful that we can get to the best outcome for Canadians.' LeBlanc said Lutnick listens carefully, takes notes and asks questions. Hillman said they talked with the commerce secretary about ways to address U.S. concerns, citing the dumping of steel and aluminum in other countries that drives down domestic production. 'It's going to take a bit of time but we had positive conversations,' Hillman said. 'I think we both came out feeling good.' Earlier Tuesday, U.S. Ambassador to Canada Pete Hoekstra gave a Canadian audience a similarly positive reflection on the bilateral relationship that has been rocked by Trump's tariffs and threats to make Canada a U.S. state. Speaking at a Toronto event organized by the Empire Club of Canada, Hoekstra said Trump's tariffs can be an opportunity for Canada. The president hit Canada with economywide tariffs related to fentanyl in March, but walked the levies back a few days later for imports compliant under the Canada-U.S.-Mexico Agreement on trade, called CUSMA. Trump has also hit Canada with 25 per cent tariffs on automobiles, with an exemption for American-made components in vehicles. Hoekstra, a former congressman for Michigan, said as Ottawa and the Trump administration go through these negotiations, 'our chief competitor here is China.' 'How do we use the strengths of the U.S. auto industry? How do we use the strengths of the capabilities of Canada, and how do we bring those together in such a way that we're beating China and not each other?' Hoekstra said. The president still seems committed to his goal of realigning global trade through tariffs. He posted on social media Tuesday that 'Because of Tariffs, our Economy is BOOMING!' Economists have said the higher tariffs could lead to significant cost increases for Americans. The government's producer price index says the price of steel products has gone up roughly 16 per cent since Trump implemented the tariffs. Trump imposed 25 per cent steel tariffs and 10 per cent aluminum levies during his first administration for about a year. The Washington-based Tax Foundation reported that during that period, companies were forced to pay higher prices and the duties resulted in the loss of about 75,000 manufacturing jobs. The Peterson Institute for International Economics concluded that each job saved in steel-producing industries by the tariffs came at a high cost to consumers — roughly $650,000 per job. On May 30, after Trump announced he was doubling the tariffs, Canadian Labour Congress president Bea Bruske said it was 'yet another direct attack on Canadian workers and a reckless move that will send shock waves across the Canadian economy.' 'This decision will shut us out of the U.S. market completely, devastating Canada's steel and aluminum industry and threatening thousands of good-paying, unionized Canadian jobs,' Bruske said. This report by The Canadian Press was first published June 3, 2025. Error! Sorry, there was an error processing your request. There was a problem with the recaptcha. Please try again. You may unsubscribe at any time. By signing up, you agree to our terms of use and privacy policy . This site is protected by reCAPTCHA and the Google privacy policy and terms of service apply. Want more of the latest from us? Sign up for more at our newsletter page .
Fast Company
3 days ago
- Business
- Fast Company
How product companies can smartly navigate tariffs, supply chain pressure
The next wave of physical product innovation needs to go beyond new features and aesthetics. Technical products are large investments and must be designed for resilience in an unpredictable global trade environment. With the current political administration's sweeping global tariffs, officially announced on April 2, many manufacturers are revisiting design decisions made years ago. Factors like sourcing and factory location, previously largely unseen, can now determine which products will remain profitable, which will become liabilities, and which must be redesigned to maintain viability. The prior USMCA/CUSMA free trade agreements remain in place for North American product companies, meaning low or no tariffs on compliant products. However, products beyond the scope of the CUSMA will face tariffs of 25%, which includes hundreds of product types. Companies are already adjusting. According to the World Economic Forum, 40% of businesses are increasing US sourcing, and a third are cutting costs to offset tariffs. Based on recent sales calls, we see tariff concerns firsthand, and leads frequently ask how to mitigate tariff impacts. My company has guided hundreds of manufacturers through new product development challenges, and we are seeing a fundamental shift in how smart companies approach product design. If you or your clients are making products that cross the US border, it's time to get strategic. By following the principles and road map outlined below, you can make design resilience a competitive advantage. THE VULNERABILITY OF INFLEXIBLE DESIGN When trade policies shift, the greatest vulnerability isn't in your supply chain; it's in your product design. Who has design control? And what are your options when it comes to sourcing component parts? These questions are critical. A medical device manufacturer with high sales numbers in North America recently discovered this when 45% tariffs on Chinese electronics transformed their profitable monitoring system into a loss leader overnight. The culprit wasn't just sourcing strategy but design decisions that locked them into specific components from newly expensive locations. Due to the unprecedented nature of current US tariffs, manufacturers face design constraints they never anticipated. Products developed without consideration for manufacturing flexibility have little room to maneuver when tariffs suddenly alter the economics. That makes you and your profit margins vulnerable. Companies that can quickly adapt their designs for alternative sourcing will have a significant competitive advantage. Not only can companies protect their bottom line through flexibility, but tariff resilience is also becoming a procurement criterion. Major retailers and business-to-business (B2B) customers now evaluate suppliers on design flexibility and adaptability to changing trade conditions. From COVID-era supply chain disruptions to the US tariffs in 2025, product manufacturers have learned they can't take anything for granted. That's why forward-thinking companies are implementing new design requirements that build in resilience from the start: Keep your (sourcing) options open: Some electronics manufacturers now classify components based on availability across different tariff zones, with critical components requiring multiple sourcing options from different regions. I have spoken to several electronics manufacturers and component suppliers deploying this strategy, mainly in an ad hoc method, as tariff uncertainty continues. Choose materials wisely: Even subtle material choices on product components can dramatically affect tariff treatment. Certain plastics qualify for preferential treatment under trade agreements while nearly identical alternatives don't—a difference that can represent broad tariff swing percentages. Take care that your materials choices do not affect the entire tariff assessment for your product. Go modular—with care: Many products are increasingly made up of several modules, enabling companies to quickly shift production location of specific sub-assemblies if tariff conditions change. Care must be taken with margin-sensitive products, however, as I've found that modularity always increases product cost. In my experience, modular products require higher up-front investments in tooling and manufacturing setup. These can be offset if production volumes remain high, but when margins are tight, it increases risk for new products early on—so a shift to modularity to mitigate tariff and supply chain uncertainty will likely not pay off in the short term. Beyond principles, companies need practical tools for trade-resilient design. Three key approaches leading companies use: Simulators: Forward-thinking development teams can create simulations showing how trade disruptions might impact product designs. • Create two versions of your bill of materials (BOM) with different build locations, part costs and part suppliers. • Add additional info to track in-transit supply costs and calculate how tariff changes and factory location may affect total product cost in either scenario. Metrics: Traditional design metrics focus on acceptable product performance at the lowest cost. But the best companies now track additional metrics: • Geopolitical exposure index: What percentage of supply components come from politically sensitive regions? • Redeployment time and cost: How quickly can you shift production to a different region? Moving a physical product design involves setting up new suppliers, ensuring their quality, and transferring design files and custom tooling. Moving locations becomes cumbersome and expensive if your manufacturer controls design and the manufacturing process changes. Unless your yearly production volume is very high, this cost can far exceed simply paying a tariff. Cross-functional integration: Studies suggest companies with highly integrated design and supply chain teams experience fewer disruptions during volatile periods (like a trade war). Breaking down walls between design and supply teams to strategize on trade compliance is an essential tactic. DESIGN A RESILIENCE ROAD MAP For companies looking to enhance their design resilience, I recommend a phased approach: Assess: Evaluate your current products for tariff sensitivity and design inflexibility. Identify components and assemblies that could prevent manufacturing relocation. Prioritize: Focus initially on high-volume and high-impact products with significant tariff exposure before expanding to other product lines. Build cross-functional teams: Ensure design, supply chain, and trade compliance teams collaborate from the earliest concept stages, and ensure the product owner maintains design control of all product builds, engineering changes, and unique manufacturing processes. Measure: Create specific measurements for design flexibility and resilience, and incorporate them into product development gates. FROM DOWNSTREAM TO PRIMARY CONCERNS Integrating tariff and supply chain changes into product design represents a fundamental shift in development strategy. What was once considered a hidden downstream concern is now a critical design parameter that must be addressed from the earliest stages of conception. This new climate presents challenges, but it can also be a golden opportunity. Those who quickly adapt their design processes will gain significant cost stability, market responsiveness, and long-term competitiveness advantages. The new competitive edge is not just having the best product. It's designing the one that is most resilient to supply.
