Latest news with #Canada-US-MexicoAgreement
Global News
11 hours ago
- Business
- Global News
Tariff uncertainty could cause ‘modest recession,' new summer outlook warns
The uncertainty around the tariffs imposed by U.S. President Donald Trump on Canada could cause a 'modest recession' in 2025, a new report by Deloitte says. The report noted that Canada's economy will grow by 1.1 per cent by the end of 2025, accelerating to 1.6 per cent by next year. However, the uncertainty around Trump's tariffs will continue to cause economic damage. Deloitte chief economist Dawn Desjardins said in the report that 'the extreme rise in policy uncertainty' in Canada's relationship with its largest trading partner, the United States, 'now exceeds levels experienced during the pandemic.' She said this 'is taking a toll on confidence with consumer and business confidence measures falling to the lowest levels outside the pandemic.' Desjardins said the uncertainty will delay business investment in Canada and hiring will be hit. Story continues below advertisement 'A modest recession is likely to occur this year,' Desjardins said. 5:42 What the looming recession could mean for your wallet Tariff impact The report said that while Canada's exposure to Trump's tariffs has been less than the average tariffs on other countries, with Canadian exporters complying with the Canada-US-Mexico Agreement (CUSMA) escaping the 25 per cent Trump tariffs, the uncertainty is hurting trade with the U.S. Story continues below advertisement 'Recent data however showed a sharp drop in Canadian exports to the US which may continue over the months ahead especially for products, like steel and aluminum and finished autos, that continue to face steep tariffs,' the report said. Get daily National news Get the day's top news, political, economic, and current affairs headlines, delivered to your inbox once a day. Sign up for daily National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy Ontario will be particularly hard hit given its exposure to industries with large tariffs in place, the report said, with B.C. and Quebec also expected to take a hit. Canada's growth will largely be led by energy-exporting Alberta, as well as Saskatchewan and Newfoundland and Labrador, the report said. 1:08 Canadians cut back on charity as economic pressures mount Will the Bank of Canada cut rates? During its last interest rate announcement earlier this month, the Bank of Canada held interest rates steady. While the economy may continue to soften, the central bank has indicated that its focus will turn to keeping prices low. Story continues below advertisement The Deloitte report forecasts only two more interest rate cuts for the rest of the year from the central bank. 'With tariffs set to nudge inflation higher over the coming months, the Bank is likely to cut interest rates only two more times in July and September, when the economy is contracting mildly, before pausing and turn the stimulus baton over to government,' the report said. 1:59 Major policy win for Carney as major projects bill passes in Canada's House The Mark Carney government's 'One Canadian Economy' bill, which aims to knock down federal barriers to interprovincial trade and remove some regulatory measures for big projects, will also likely give the economy some boost by the end of the year, the report said. 'Many provinces are following suit to reduce interprovincial trade barriers and build more infrastructure, boding well for our economic resilience and long-term prosperity,' the report said. Story continues below advertisement 'Overall, we expect to see modest growth in fiscal operational spending and a ramp up in government investment starting in the final quarter of this year,' it added. 1:48 Carney to increase U.S. steel, aluminum tariffs if trade talks with Trump stall Jobs and household spending The report notes that employment has already taken a hit in Canada's manufacturing sector, which has been impacted by U.S. tariffs on steel, aluminum, softwood lumber and cars. Story continues below advertisement This is likely to hit hiring across the broader economy, it said. 'We are seeing that weakness spill into other industries with transportation and warehousing and business services also recently reducing their workforces,' the report said. Deloitte forecasts unemployment to be around 7.3 per cent in the third quarter of 2025, but drop below seven per cent by early next year. Weak job numbers will also mean Canadians are likely to spend less. Lower immigration numbers will also contribute to lower household spending, the report said.
National Observer
13-05-2025
- Business
- National Observer
Canada's ambassador says economic talks must prioritize the lifting of Trump's tariffs
Ottawa's top diplomat in Washington says talks to negotiate any new deals with the United States will prioritize ending US President Donald Trump 's ruinous tariffs on Canadian exports. Ambassador to the United States Kirsten Hillman said Monday that initial negotiations with Trump's team will focus on lifting tariffs, as well as specific bilateral issues between Canada and the US. "Dealing with those tariffs, and getting Canada into a position where we are finding stability in the trading relationship, is our number one priority with the Americans," Hillman said. "There is no discussion to be had with the Americans without that being on the table from Canada's perspective. That is a starting point for us." Trump also said he wants changes to the Canada-US-Mexico Agreement on trade, called CUSMA. Hillman said talks specific to the continental trade pact will take place separately at a later date. Trump slapped Canada with 25 per cent economywide duties in March, only to partially pause tariffs on imports compliant with CUSMA a few days later. Canada is also being hit with tariffs on steel, aluminum and automobiles. CUSMA was negotiated during the first Trump administration and some experts say the tariffs were meant to rattle Canada and Mexico ahead of a mandatory review next year. Hillman said in the week since Prime Minister Mark Carney met with Trump at the White House, she has spoken with United States Trade Representative Jamieson Greer and International Trade Minister Dominic LeBlanc has been in contact with US Commerce Secretary Howard Lutnick. "The process now will be to get those discussions started in a serious and substantive way," Hillman said. The president and prime minister both described the encounter as cordial and productive, clearing the slate for bilateral talks that had been undermined by Trump's repeated talk of making Canada a US state. While the president assured reporters in the Oval Office he was still keen on annexing Canada, he softened his tone, saying, "It takes two to tango." Hillman said that despite those comments, Trump repeatedly told Carney in public and behind closed doors that it was an honour to speak with him. Canadians were looking to reset the relationship with the White House and Hillman said Trump set the tone for open lines of communication and professionalism. "They agreed to negotiate a deal that works for both countries," she said. Trump said last Tuesday that CUSMA was very effective and is "still very effective." The president also described it as a "transitional deal" and said he didn't know if it was "necessary anymore." Carney said Canada is also looking to change some aspects of the continental trade pact. The prime minister pointed to the national security exemptions in trade law that allowed Trump to slam Canada with tariffs — which the president linked to baseless claims about widespread fentanyl trafficking over the Canadian border. For now, Hillman said, the priority is to work on negotiations between Canada and the United States on bilateral issues like Arctic security, defence and the northern border that don't necessarily fit into CUSMA talks. "The US has been clear with us since the president took office that they are looking to have bilateral discussions with every country," she said. "They are engaged with a bilateral discussion with Mexico now. Mexico is in town almost every week talking to the Americans." Trump took his trade war to the world in April with "reciprocal" tariffs. He walked the most significant tariffs back a few hours later, putting in place a 10 per cent universal levy for 90 days, which he said would give countries time to make a deal. As other nations race to find ways to deal with the Trump administration, Hillman said she has "every expectation that (Canada) will be able to have the time we need with the administration to deal with our issues." "There's a strong signal from the top level in this country that Canada is a priority," she said. "That's not just because the president clearly wants it to be so, but it's also because we're their biggest customer by far." This report by The Canadian Press was first published May 13, 2025.
National Observer
05-05-2025
- Business
- National Observer
Experts see hopeful signs as Prime Minister Mark Carney prepares to talk trade with Trump
Prime Minister Mark Carney will be watched closely by Canadians infuriated by Donald Trump — and by an anxious business community looking for tariff relief — when he meets with the US president Tuesday in Washington. After months of Trump's annexation threats, the newly elected prime minister will be tasked with a delicate balancing act — showing strength while maintaining Canada's place in a critical North American trade pact the president's tariffs have sought to upend. "My government will fight to get the best deal for Canada," Carney said Friday in his first news conference since the election. The Canada-US-Mexico Agreement on trade, called CUSMA, was negotiated during the first Trump administration. Trump at the time called it the best deal ever and Canadian officials declared it a victory for Canada. CUSMA is up for review next year — but after Trump's return to the White House, it quickly became clear the president intended to rattle the continental trade pact. Canada and Mexico were hit early with tariffs the president linked to the flow of fentanyl and people across the borders. US government data shows a tiny volume of fentanyl is intercepted at the US-Canada border. Both countries were also hit by Trump's steel, aluminum and automobile duties. Trump's provocations included calling then-prime minister Justin Trudeau a "governor" and saying the country would be better off as a US state. Experts see hopeful signs as Mark Carney prepares to talk trade with Trump. While the duties alarmed America's closest neighbours, signs have emerged that the president still values CUSMA — a key achievement of his first administration. When Trump took his trade war to the world with "reciprocal" tariffs in early April, Canada and Mexico weren't included. Trump paused the largest of those duties for 90 days, saying it would allow time to negotiate deals, but kept in place a 10 per cent universal tariff on most imports to the US. "If you read the tea leaves, Canada and Mexico seem to have been set aside … Hopefully that means that the administration is going to be looking at (CUSMA) as a package,' said Laura Dawson, an expert on Canada-U. S. relations and the executive director of the Future Borders Coalition. Tuesday's meeting could provide insights into Trump's plan for what was once one of the most stable and friendly bilateral relationships in the world. Trump last week described Carney as "a very nice gentleman" and said he expects to have a "great relationship" with Canada. United States Trade Representative Jamieson Greer hinted the Trump administration wants to maintain partnerships with its close neighbours. Greer told Fox News last week that "the president very much wants to have a healthy relationship in North America." "We should have more manufacturing in North America — we need to have it in our hemisphere," Greer said. But it's still not clear what Trump's team wants from Canada. Speaking about negotiations with other countries, Greer described a "good deal" as one which sees countries drop tariff levels and remove non-tariff barriers on things like US agricultural products. He said a good deal would address American concerns about digital trade and intellectual property, align export controls for economic security and offer the US commercial opportunities, including investments in critical minerals. CUSMA provided tariff-free trade for nearly all goods between Canada and the United States. The US Department of Defense and Ottawa are already co-investing in Canadian critical mineral projects. Canada imposed tariffs on Chinese electric vehicles, steel and aluminum, in part to appease US concerns. Steve Verheul, Canada's former top trade negotiator, recently told the Public Policy Forum's Canada Growth Summit that the current atmosphere is similar to the tensions during the first Trump administration after the president tore up the North American Free Trade Agreement, which was replaced by CUSMA. Verheul said the United States put forward "very extreme, completely unacceptable" proposals but Canada eventually navigated the situation by being creative and bringing forward solutions. Although Canada is once again seeing extreme proposals, Verheul said he sees signs of Trump backing down. The president repeatedly postponed tariffs on Canada. While he went forward with the duties in March, he partially walked them back for imports compliant with CUSMA rules only a few days later. Trump also reduced the impact of tariffs on the North American automobile sector. Verheul said Canada is in for "a difficult negotiation" but he thinks there will ultimately be duty-free trade. Canada must show a unified front in its talks with the administration, Dawson said. Trump has already taken notice of the Liberal minority win and said the "tight race" will make it "very complicated for the country." Dawson said Carney should form a multi-party front on trade. During the first Trump administration, Ottawa's cross-party NAFTA advisory panel included Rona Ambrose, the former interim Conservative leader. "There's got to be strong Conservative representation, strong regional representation, strong sectoral representation,' Dawson said. Carney will have to be strategic, she said. Canadian businesses want room for economic growth in Canada and the US, but the prime minister cannot suggest that all is forgiven, Dawson added. "There still is a lot of animosity in Canada," she said. "It's going to be difficult to manage a short-term crisis … with the United States as well as a long-term competitiveness challenge for Canada's domestic economy." Other politicians in Canada will also be watching what happens at Tuesday's meeting, including the leaders of Yukon, Northwest Territories and Nunavut, who met for the Northern Premiers' Forum on Sunday. When asked what they hoped to see from the Trump-Carney meeting, P.J. Akeeagok, R.J. Simpson and Ranj Pillai noted it was encouraging that projects like an Arctic security corridor in the North are now front-and-centre on the national agenda. "We're very excited to hear some of these big projects on the radar, but we look forward to actually seeing the results and investments actually come. But we've heard (Carney) say he wants to be bold and act very quickly and that's something we very much support here in Nunavut," Akeeagok, Nunavut's premier, told reporters after the forum.
National Observer
05-05-2025
- Politics
- National Observer
Trump says 'highly unlikely' US. would ever use military force to annex Canada
US President Donald Trump says it is "highly unlikely" the United States would ever use military force to annex Canada, though he maintains he will continue to push to make Canada the 51st state. In a wide-ranging interview on NBC's "Meet The Press" which aired Sunday, Trump said he wouldn't rule out military force against Greenland, but he didn't see it happening with Canada. "I think we're not going to ever get to that point," Trump said. "Something could happen with Greenland. I'll be honest, we need that for national and international security." "But I think it's highly unlikely ... I don't see it with Canada. I just don't see it, I have to be honest with you." Trump's remarks come as Prime Minister Mark Carney is set to have his first face-to-face meeting with the president this week in Washington, in which the countries' trade war will be the top topic of conversation. On Sunday, Trump called Carney "a very nice man" and that he congratulated the prime minister on his election victory during their call last week. "There's no majority or anything, so that's going to make things a little bit difficult, I think, for him to run," Trump said. "But he nevertheless had a victory and he's a very nice man, I think." The Canada-US-Mexico Agreement on trade, called CUSMA, was negotiated during the first Trump administration. At the time Trump called it the best deal ever, and Canadian officials declared it a victory for Canada. CUSMA is up for review next year, but after Trump's return to the White House it quickly became clear the president intended to rattle the continental trade pact. Canada and Mexico were hit early with tariffs the president linked to the flow of fentanyl and people across the borders. US government data shows a tiny volume of fentanyl is intercepted at the US-Canada border. Both countries were also hit by Trump's steel, aluminum and automobile duties. Speaking with reporters in Ottawa on Friday, Carney said he would be working to get the best deal for Canada. Asked by "Meet the Press" host Kristen Welker whether Trump will talk to Carney about becoming the 51st state, Trump replied he'll "always talk about that." "You know why? We subsidize Canada to the tune of $200 billion a year," Trump said. In fact, the United States' trade deficit with Canada was $63.3 billion in 2024, according to the Office of the US Trade Representative. A trade deficit is also not a subsidy. The US imported $412.7 billion of Canadian goods in 2024, most of which being energy and minerals. "We don't need their cars, we don't need their lumber, we don't need their energy, we don't need anything. We do very little business with Canada. They do all of their business practically with us," Trump said. According to data from the US Census Bureau, the US imported more goods from Mexico and China than it did from Canada in 2024. Canada represented 12.6 per cent of all US imports. By contrast, Canada exported 75.9 per cent of its goods to the US. "We don't need their cars. In fact, we don't want their cars. We don't need their energy. We don't even want their energy. We have more than they do," Trump said. "We don't want their lumber. We have great lumber. All they have to do is free it up from the environmental lunatics. We don't need anything that they have."
National Observer
30-04-2025
- Automotive
- National Observer
Trump signs executive orders to give automobile industry tariff relief
US President Donald Trump signed executive orders Tuesday that he said will give some temporary relief to an automotive industry besieged by multiple tariffs that have caused anxiety and concern throughout the deeply integrated North American market. "We just wanted to help them endure this little transition, short term … If they can't get parts, you know it has to do with a very small percentage, if they can't get parts we didn't want to penalize them," Trump told reporters at the White House. An official with the Commerce Department said in a call with reporters Tuesday that the administration will offer automakers that finish their vehicles in the US a rebate on imported auto parts that is equal to 15 per cent of a vehicle's retail price. The rebate would drop to 10 per cent the following year. A 25 per cent tariff on auto parts was set to go into place next month and the Commerce official said the change will offset its impact. "We are just giving them a little chance because in some cases they can't get the parts fast enough," Trump said. "So this is just a little transition." Trump slapped a 25 per cent tariff on vehicle imports to the United States earlier this month. Automakers are also being hit with 25 per cent duties on aluminum and steel, as well as the president's 10 per cent universal tariffs and 145 per cent levies on Chinese imports. Trump signed a second executive order Tuesday so that companies paying the automobile tariffs won't see some other levies — including the ones on steel and aluminum — stacked on top of each other. Treasury Secretary Scott Bessent told a White House briefing earlier Tuesday that Trump is committed to bringing automobile manufacturing back to the United States. "We want to give the automakers a path to that quickly, efficiently, and create as many jobs as possible," Bessent said. It's not immediately clear what the full impact of the change will be for Canada's auto industry, which received a partial carve-out from Trump's tariffs for vehicles compliant with the Canada-US-Mexico Agreement on trade, called CUSMA. The current duties only hit the value of the non-American parts of vehicles finished in Canada. Candace Laing, president and CEO of the Canadian Chamber of Commerce, said the ongoing inconsistency of Trump's tariffs is driving away investment and business in Canada and the US. Only an end to tariffs will provide real relief, she said. "North American autoworkers, plants and investors can't predict how the US administration will wake up and feel on any given morning," Laing said in a statement. "Business plans are delayed. Pricing pressure is rising." Bessent said Trump had meetings with domestic and foreign auto producers before making the changes. General Motors chair and CEO Mary Barra said the company appreciates "the productive conversations" with the president and his administration and looks forward "to continuing to work together." "We believe the president's leadership is helping level the playing field for companies like GM and allowing us to invest even more in the US economy," Barra said in an emailed statement. Six of the auto industry's largest lobbying groups sent a letter to the Trump administration last week urging tariff relief and warning of supply chain disruption and higher prices. The letter said "most auto suppliers are not capitalized for an abrupt tariff induced disruption." "Many are already in distress and will face production stoppages, layoffs and bankruptcy," said the letter, which was signed by the Alliance for Automotive Innovation, which represents every major automaker in the United States except Tesla Inc. The announcement came as Trump was headed Tuesday to Michigan, the heart of America's automobile industry, for a rally to mark his administration's first 100 days. The state is home to the Detroit Three — Ford, General Motors and Chrysler, now part of Stellantis — all of which have been pushing the president against tariffs that are upending the deeply integrated North American automobile industry. Matt Blunt, president of the American Automotive Policy Council, which represents the Big Three, said applying multiple tariffs to the same product was causing significant concerns. Stellantis chairman John Elkann said the company appreciates the tariff relief. "While we further assess the impact of the tariff policies on our North American operations, we look forward to our continued collaboration with the US administration to strengthen a competitive American auto industry and stimulate exports," Elkann said in an emailed statement. Trump has claimed Canada is taking American automobile jobs but the two countries have been developing the industry in tandem since the early 1900s. Integration was deepened with the 1965 Auto Pact trade deal between Canada and the US. CUSMA, negotiated during the first Trump administration, increased protections for the automobile industry. Vehicles can cross the border multiple times before completion and Trump's tariffs have led to confusion and concern on both sides of the Canada-US border. "Whether the US administration likes it or not, we're in this together and supply chains don't heal quickly once broken," Laing said. Anderson Economic Group, a Michigan consulting firm, estimated earlier this month that an extra US$5,000 could be added to the cost of the lowest-tariffed American cars, and up to US$12,000 to the price of full-sized SUVs. Trump's tariffs have since changed rapidly.
