Latest news with #Canada–UnitedStates–MexicoAgreement
Vancouver Sun
6 days 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
6 days 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.
Time of India
02-05-2025
- Automotive
- Time of India
Trump's tariff not applicable on Canadian auto parts under CUSMA compliance
In a significant development for North American trade relations , Canadian auto parts that meet the regulatory standards outlined in the Canada–United States–Mexico Agreement (CUSMA) will be exempt from the latest U.S. tariffs. The decision comes as a relief for Canada's auto industry , which had been bracing for the economic impact of new protectionist trade measures announced by the United States. #Pahalgam Terrorist Attack Pakistan reopens Attari-Wagah border to allow stranded citizens in India to return Key Jammu & Kashmir reservoirs' flushing to begin soon Air India sees Pakistan airspace ban costing it $600 mn over 12 months The Trump administration recently imposed a wave of new tariffs targeting key imports, particularly from China, but concerns were rising that Canadian manufacturers could be inadvertently affected. However, under CUSMA — the successor to NAFTA — parts that qualify as originating from Canada are protected from such trade actions. Also read: Auto wars begin: Canada slaps 25% tariffs on US cars, spares supply chains after Trump's trade war by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo Why Canadian auto parts are protected The Canada–United States–Mexico Agreement, which came into force in July 2020, includes specific rules of origin that define which goods qualify for tariff-free access among the three member countries. For auto parts, this typically means that a certain percentage of the materials and labor must come from within North America. Auto components made in Canada that meet these requirements are now officially confirmed to be exempt from U.S. tariffs, even as the United States seeks to bolster domestic manufacturing by targeting foreign-made goods. This clarification provides welcome stability to a sector already navigating global supply chain disruptions, inflationary pressures, and increasing competition from electric vehicle (EV) manufacturers. Live Events Relief for the Canadian auto industry The exemption is a major win for Canada's auto parts manufacturers, many of whom operate close to the U.S. border and supply parts for vehicles assembled in Michigan, Ohio, and other major American auto hubs. According to Automotive Parts Manufacturers ' Association (APMA) President Flavio Volpe, 'The confirmation that CUSMA-compliant Canadian parts are not subject to U.S. tariffs is not just a technical detail — it's a signal that North American manufacturing remains a cooperative, integrated effort.' Also read: Canada imposing 25% tariff on some US auto imports With the U.S. auto market being Canada's largest export destination for vehicle parts, the impact of any new tariffs could have been severe. The Canadian auto industry supports over 500,000 direct and indirect jobs, and this exemption helps safeguard economic growth in key provinces like Ontario and Quebec. Trade agreements as economic shields The exemption reinforces the role of CUSMA as a shield against unilateral trade disruptions. Trade experts argue that without CUSMA, Canada's manufacturers might have been caught in the crossfire of the U.S.'s evolving industrial strategy — especially as the U.S. looks to reduce dependency on foreign supply chains in critical sectors like automotive and semiconductors. Furthermore, this decision is likely to ease diplomatic tensions between Ottawa and Washington, showcasing how clear regulatory frameworks and cooperative trade policy can mitigate conflict and foster stability. Conclusion: policy certainty in an uncertain economy For now, Canadian auto parts manufacturers can continue their cross-border operations with confidence, knowing their products will not be impacted by the latest round of U.S. import tariffs — as long as they comply with CUSMA regulations. The decision highlights the ongoing value of free trade agreements and reaffirms Canada's place in a secure, tariff-free North American supply chain.
