Latest news with #Mexico-Canada
Yahoo
30-05-2025
- Business
- Yahoo
Analysis-Mexico hopes early review of USMCA can end uncertainty, revive flagging investment
By Emily Green MEXICO CITY (Reuters) -Falling investment, slowing growth, and the changing whims of U.S. President Donald Trump have led Mexico to support an early review of the U.S.-Mexico-Canada (USMCA) trade agreement, a sharp U-turn on its previous plan to hold off for as long as possible. Three Mexican officials told Reuters the shift was due in part to the need to gain some longer-term certainty around the country's trade relationship with its largest export market. But they said it was also key that Trump appeared to want an earlier review, because the U.S. president holds better cards and trying to keep on his good side has been a core Mexican strategy that has shown positive results. Mexico's Economy Minister Marcelo Ebrard said this week he expects the review's 'formal start' to begin as soon as September, despite being scheduled in the agreement for 2026. It is clear that Trump has more leverage, said Juan Carlos Baker, Mexico's former chief negotiator for USMCA. 'If he believes Mexico is not playing ball, you might be risking he will one day show up and announce the U.S. is exiting the agreement altogether,' he said. Mexico is looking for any clarity it can find. The uncertainty over trade rules has already impacted its economy. Foreign direct investment in the first quarter of the year fell 21% compared to the same period last year, according to figures from Mexico's Central Bank. Some of that may be related to business community jitters about Mexico's judicial reform. Still, uncertainty over tariffs has played a significant role. On Wednesday, the central bank cut its GDP forecast for this year to just 0.1%. The International Monetary Fund prediction is even worse at -0.3%. 'Uncertainty kills investment,' said Emilio Romano, president of Mexico's Bankers Association, noting that 40% of Mexico's GDP is U.S.-dependent. Mexico's reliance on the U.S. makes the USMCA negotiations almost existential to the country's economy and a huge priority for Sheinbaum. Over 80% of total Mexican goods exports go to the U.S. and free trade with its northern neighbor drove Mexico to overtake China as the U.S.'s top trading partner and turned it into one of the world's largest auto manufacturers. Mexican officials are worried enough about angering Trump that they have held off signing an updated trade agreement with the European Union for fear it could jeopardize trade talks with the U.S., according to one European official. UNRELIABLE NEGOTIATIONS Mexico had originally wanted to wait as long as possible before opening talks on USMCA, so it could first resolve bilateral issues like the tariffs imposed due to fentanyl trafficking and migration, and so U.S. consumers would begin to feel inflationary pressures from Trump's tariffs. That approach tallies with Canada's, with Prime Minister Mark Carney saying this week he wanted to make progress on bilateral issues with the U.S. before opening talks on USMCA. Amid the uncertainty, Ebrard and his deputy Luis Rosendo Gutierrez have for months been almost constantly shuttling between Mexico and Washington, to meet with U.S. Commerce Secretary Howard Lutnick, a billionaire investor, and Jamieson Greer, a former Air Force officer who is Trump's top trade official. 'It's important to be in Washington just to take care of any issues that can come suddenly to the table. And it's important to be present,' said a Mexican official familiar with the negotiations. 'We are taking care of our place in relative terms with other countries.' But negotiations with the Trump administration can be unreliable. In April, as the screwworm parasitic fly threatened to decimate Mexico's billion-dollar cattle market, officials reached an agreement that the U.S. would not close its border to livestock in exchange for Mexico doing more to fight the pest. Just 11 days later, the U.S. abruptly shut the border anyway, catching frustrated Mexican officials flat-footed. The question mark hovering over USMCA's future has overshadowed victories by Mexico's negotiating team, including convincing the Trump administration to suspend tariffs on USMCA-compliant auto parts. 'We left intensive care. Now we are in intermediate care,' said Francisco Gonzalez, executive director of Mexico's National Auto Parts Association. Until the USMCA review is complete, he said new investment is 'pretty much suspended, basically on standby.' 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
Mint
23-05-2025
- Business
- Mint
Global finance officials gloss over trade tensions at G-7 Summit
BANFF, Alberta—Finance officials from some of the world's most powerful nations glossed over simmering tensions triggered by President Trump's far-reaching tariffs during an economic summit in this small ski town. At the close of the three-day meeting, the Group of Seven finance and central bank chiefs issued a vague joint statement that offered few details about what was discussed at the meetings and the commitments countries were prepared to make on trade. The joint statement mentioned the word 'trade" once and made no mention of tariffs, despite the topic being a focal point in private discussions at the conference. 'We are committed to working together to achieve a balanced and growth-oriented macroeconomic policy mix that supports our economic security and resilience and ensures that all of our citizens can benefit from that growth," the joint statement said. 'We acknowledge that economic policy uncertainty has declined from its peak, and we will work together to achieve further progress." The meeting featured U.S. Treasury Secretary Scott Bessent and finance officials representing Canada, France, Germany, Italy, Japan and the U.K., as well as those from the European Union. Canada was hit with 25% tariffs on its steel, aluminum, assembled vehicles and other goods not compliant with the U.S.-Mexico-Canada trade pact. Imports from Europe, meanwhile, face an across-the-board 10% tariff and a heftier 25% levy on its cars, steel and aluminum. Behind closed doors, the G-7 finance officials discussed working together to counter the effect of what the U.S. has called China's unfair trade practices, according to a U.S. official. One option that has been discussed privately by Bessent and other U.S. officials is a 'unified tariff policy," in which American allies would work to impose a new joint trade policy on China to increase pressure on Beijing, the U.S. official said. The nascent idea is still being considered by Trump administration officials and wasn't discussed during the summit, the official said. A Treasury Department spokeswoman declined to comment on the idea of a unified tariff policy. In a briefing with reporters, Canadian Finance Minister François-Philippe Champagne declined to offer specifics on how the G-7 intends to address global trade imbalances, especially related to China. He said the inclusion of a reference to trade imbalances in the joint statement and the G-7's commitment to joint action 'sends a strong signal." As for the scant references to trade in the joint statement, which is often referred to as a communiqué, Champagne said, 'The choice of words in a communiqué is an art. What matters is that we came out with a common position." He called the document 'focused and action-oriented." A European official in attendance for the summit told The Wall Street Journal that many of the G-7 officials scheduled time to talk to Bessent about the tariffs. While talks were largely cordial, the EU privately pushed for stronger language in the final G-7 statement to reflect the negative impact that U.S. trade policy is having on the global economy, according to Valdis Dombrovskis, the EU's commissioner for economy and productivity. Christine Lagarde, president of the European Central Bank, and Kazuo Ueda, governor of the Bank of Japan, during a working lunch at the G-7 meeting in Banff, Canada. This week's summit came after the U.S. imposed tariffs on a range of nations, only to later pare some of them back. Bessent and his U.S. team recently agreed in private meetings in Switzerland with their Chinese counterparts to reduce baseline tariffs on China from 145% to 30%. The U.S. official told The Wall Street Journal that the talks on trade were 'convivial." The official was surprised at the constructiveness of the conversations after tense meetings between Bessent and world leaders about the tariffs in Washington in April during the World Bank Group and International Monetary Fund spring gathering. Bessent privately encouraged EU officials to significantly pare back and work to remove digital-services tax levied by some European countries if there is to be expeditious trade deals with the U.S., the U.S. official said. France, Italy and the U.K. each have such a tax on revenue earned by foreign technology companies selling services in the countries. The U.S. has criticized the taxes, arguing they amount to unfair trade practices. Bessent told EU officials they have a 'collective action problem," warning that progress on reaching a trade deal with Europe has slowed because each nation has different priorities for an agreement. Canada also has a digital-services tax, and that levy is a source of contention between Washington and Ottawa dating back to the Biden administration. In February, the White House declared that Canada's digital levy is an unfair trade practice that could lead to stiffer U.S. tariffs. The war between Ukraine and Russia was also a central topic at the G-7 finance summit. Bessent privately told European officials that the U.S. is willing to increase sanctions on Russia to pressure President Vladimir Putin to come to the negotiating table with Ukraine, according to the U.S. official. Ukraine's finance minister Sergii Marchenko was in Banff for the G-7 finance meeting. At the meetings, G-7 representatives agreed that new sanctions against Russia must be on the table, including sanctions targeting Russia's energy industry, according to U.S. and European officials. Any U.S. sanctions on Russia would have to be approved by Trump, who has threatened to impose new sanctions, but hasn't yet taken action. Trump told reporters on Monday that he might 'back away" from negotiations if they don't make progress. Write to Brian Schwartz at and Paul Vieira at
Yahoo
13-05-2025
- Business
- Yahoo
5 takeaways from US-China trade truce
U.S. and Chinese trade negotiators agreed over the weekend to lower mutually imposed triple-digit tariffs in a significant de-escalation of the ongoing trade war between Washington, D.C., and Beijing. Treasury Secretary Scott Bessent said Sunday after talks in Switzerland that 'substantial progress' had been made between the two countries. China and the U.S. agreed to suspend their reciprocal tariffs for 90 days to continue negotiations. The U.S. dropped its baseline tariff rate on Chinese goods from 145 percent to 30 percent, which includes a 20 percent import tax Trump imposed during his first term and another 10 percent import tax levied in February as a response to fentanyl imports. China agreed to lower its tariff to 10 percent from 125 percent. Analysts say the U.S. baseline 30-percent tariff likely stacks on top of pre-existing Section 301 tariffs for an effective rate of up to 55 percent for some sector-specific goods. The U.S. and China released a positively-toned joint statement after weekend talks about the importance of 'a sustainable, long-term, and mutually beneficial economic and trade relationship.' Analysts are viewing the de-escalation as a halftime break in initial negotiations. Here are five takeaways on the preliminary arrangement and what it means politically and economically. The preliminary agreement is another major course correction on trade from the Trump administration. While the stock market leaped up on news of progress in the talks, yields in the bond market also jumped, suggesting further financial uncertainty resulting from another substantial policy change from the Trump administration. The triple-digit reduction in the overall tariff rate on China follows a series of similar about-faces. Moves on tariffs have played double duty as both economic policy and bartering chips in bilateral trade talks. 'What this agreement doesn't mean is that tensions between the US and China won't continue to flare or that Trump is done causing economic uncertainty with the use of his favorite go-to tool, tariffs,' consultants for Beacon Policy Advisers wrote in a Monday analysis. Other recent U-turns on trade have included the cancellation, reinstatement, and subsequent reinstallation of the de minimis tariff exemption on China for commercial shipments worth $800 or less; broad-based 25-percent tariffs on Canada and Mexico, most of which then reverted to terms of the pre-existing U.S.-Mexico-Canada free trade agreement (USMCA); and a 90-day pause in Trump's country-specific 'reciprocal' tariffs, which involved a novel calculation based on trade deficits with the U.S. Bessent acknowledged the limited the scope of the early truce, but insisted it was an important step to a broader deal. 'We got a lot done over two days, so I would imagine in the next few weeks we will be meeting again to get rolling on a more fulsome agreement,' Bessent said on CNBC's 'Squawk Box.' 'We had a plan, we had a process, and now what we have with the Chinese is a mechanism to avoid an upward tariff pressure, like we did last time,' Bessent said. The deal struck by Bessent, U.S. Trade Representative Jamieson Greer, and Chinese Vice Premier He Lifeng is limited to the reciprocal tariffs that China and the U.S. imposed on each other and comes without any industry-specific policy changes. Neither China nor the U.S. made any concessions to get the other sides' tariffs dropped. Those particulars would constitute the meat of any forthcoming trade deal after the initial posturing. Trade experts on Monday emphasized the relatively modest scale of what has been agreed to so far. 'The new tariffs on China are 30 percent on about 1.2 [percentage points] of U.S. trade [and] 20 percent (the fentanyl IEEPA case) on 0.3 [points] of U.S. trade, so a 'just pay it' cost of just over 0.4 [percentage points] of U.S. GDP,' Council on Foreign Relations senior fellow Brad Setser wrote in a commentary. Setser noted the economic pressure the reduced tariffs will still have on the semiconductor sector. The deal follows another preliminary trade agreement announced last week between the U.S. and the United Kingdom that many saw as especially beneficial to U.K. automakers. 'The agreement announced today to reduce tariffs on UK car exports into the US is great news for the industry and consumers,' Mike Hawes, chief executive of British industry group SMMT, said in a statement last week. Top Democratic lawmakers, who are no fans of Trump's sweeping tariff agenda, nonetheless accused the president of backing down without a win. 'Sadly, it looks like China once again got the better of Trump. Another example of Trump chaos. He has one policy one day, one the next. Who knows what it'll be tomorrow,' Senate Minority Leader Charles Schumer (D-N.Y.) posted on the social media platform X. With the massive reciprocal tariffs scaled back to just 10 percent, attention is focusing on the tariff related to the synthetic opioid supply chain announced on March 3. The Trump administration levied that tariff because it said that China 'has not taken adequate steps to alleviate the illicit drug crisis.' 'The 30 percent tariff on China's exports is still much higher than tariffs on other countries and is still higher than at the turn of this year,' Principal Asset Management chief strategist Seema Shah wrote in an analysis. 'Trade with China is still more expensive than it was six weeks ago, suggesting a sustained negative impact on consumer spending power [and] company profit margins.' Wang Xiaohong, the Chinese security tsar in charge of fentanyl, was reportedly at the trade talks over the weekend in Switzerland, suggesting inroads into that issue are already being made. Activity at U.S. ports has dwindled as a result of the tariffs, with shipments being canceled and workers being furloughed. Port of Los Angeles director Gene Seroka told a radio station last week that they were bracing for a 35-percent drop in volume. 'It's the first arrival of container ships where the tariff was applied just last month,' he said. Business lobbies say that the tariff reduction amounts to the reversal of 'embargo-level' tariffs. The U.S. Chamber of Commerce, said it welcomed news that 'both China and the U.S. will pull back from embargo-level tariffs.' 'Even with this China agreement, tariffs are much higher overall than they were at the beginning of the year, and many businesses … are dealing with growing costs and disruptions,' the group said in a Monday statement. Stocks surged Monday morning on news of the deal, with the S&P 500 index of reaching its March 25 level — the day before stocks started cratering after the announcement of Trump's auto tariffs, and then snowballed on April 2 after the announcement of dozens of country-specific import taxes. The Dow Jones Industrial Average closed with a gain of 1,160 points Monday, rising 2.8 percent on the day The technology-heavy Nasdaq Composite closed up more than 4.4 percent. West Texas Intermediate crude oil prices were more than a $1.20 per barrel, or 1.97 percent, as of 1:35PM U.S. eastern time. The DXY dollar index popped more than 1.5 percent in midday trading, and the VIX volatility index below 20 for the first time since late March. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
The Hill
12-05-2025
- Business
- The Hill
5 takeaways from US-China trade truce
U.S. and Chinese trade negotiators agreed over the weekend to lower mutually imposed triple-digit tariffs in a significant de-escalation of the ongoing trade war between Washington, D.C., and Beijing. Treasury Secretary Scott Bessent said Sunday after talks in Switzerland that 'substantial progress' had been made between the two countries. China and the U.S. agreed to suspend their reciprocal tariffs for 90 days to continue negotiations. The U.S. dropped its baseline tariff rate on Chinese goods from 145 percent to 30 percent, which includes a 20 percent import tax Trump imposed during his first term and another 10 percent import tax levied in February as a response to fentanyl imports. China agreed to lower its tariff to 10 percent from 125 percent. Analysts say the U.S. baseline 30-percent tariff likely stacks on top of pre-existing Section 301 tariffs for an effective rate of up to 55 percent for some sector-specific goods. The U.S. and China released a positively-toned joint statement after weekend talks about the importance of 'a sustainable, long-term, and mutually beneficial economic and trade relationship.' Analysts are viewing the de-escalation as a halftime break in initial negotiations. Here are five takeaways on the preliminary arrangement and what it means politically and economically. The preliminary agreement is another major course correction on trade from the Trump administration. While the stock market leaped up on news of progress in the talks, yields in the bond market also jumped, suggesting further financial uncertainty resulting from another substantial policy change from the Trump administration. The triple-digit reduction in the overall tariff rate on China follows a series of similar about-faces. Moves on tariffs have played double duty as both economic policy and bartering chips in bilateral trade talks. 'What this agreement doesn't mean is that tensions between the US and China won't continue to flare or that Trump is done causing economic uncertainty with the use of his favorite go-to tool, tariffs,' consultants for Beacon Policy Advisers wrote in a Monday analysis. Other recent U-turns on trade have included the cancellation, reinstatement, and subsequent reinstallation of the de minimis tariff exemption on China for commercial shipments worth $800 or less; broad-based 25-percent tariffs on Canada and Mexico, most of which then reverted to terms of the pre-existing U.S.-Mexico-Canada free trade agreement (USMCA); and a 90-day pause in Trump's country-specific 'reciprocal' tariffs, which involved a novel calculation based on trade deficits with the U.S. Bessent acknowledged the limited the scope of the early truce, but insisted it was an important step to a broader deal. 'We got a lot done over two days, so I would imagine in the next few weeks we will be meeting again to get rolling on a more fulsome agreement,' Bessent said on CNBC's 'Squawk Box.' 'We had a plan, we had a process, and now what we have with the Chinese is a mechanism to avoid an upward tariff pressure, like we did last time,' Bessent said. The deal struck by Bessent, U.S. Trade Representative Jamieson Greer, and Chinese Vice Premier He Lifeng is limited to the reciprocal tariffs that China and the U.S. imposed on each other and comes without any industry-specific policy changes. Neither China nor the U.S. made any concessions to get the other sides' tariffs dropped. Those particulars would constitute the meat of any forthcoming trade deal after the initial posturing. Trade experts on Monday emphasized the relatively modest scale of what has been agreed to so far. 'The new tariffs on China are 30 percent on about 1.2 [percentage points] of U.S. trade [and] 20 percent (the fentanyl IEEPA case) on 0.3 [points] of U.S. trade, so a 'just pay it' cost of just over 0.4 [percentage points] of U.S. GDP,' Council on Foreign Relations senior fellow Brad Setser wrote in a commentary. Setser noted the economic pressure the reduced tariffs will still have on the semiconductor sector. The deal follows another preliminary trade agreement announced last week between the U.S. and the United Kingdom that many saw as especially beneficial to U.K. automakers. 'The agreement announced today to reduce tariffs on UK car exports into the US is great news for the industry and consumers,' Mike Hawes, chief executive of British industry group SMMT, said in a statement last week. Top Democratic lawmakers, who are no fans of Trump's sweeping tariff agenda, nonetheless accused the president of backing down without a win. 'Sadly, it looks like China once again got the better of Trump. Another example of Trump chaos. He has one policy one day, one the next. Who knows what it'll be tomorrow,' Senate Minority Leader Charles Schumer (D-N.Y.) posted on the social media platform X. With the massive reciprocal tariffs scaled back to just 10 percent, attention is focusing on the tariff related to the synthetic opioid supply chain announced on March 3. The Trump administration levied that tariff because it said that China 'has not taken adequate steps to alleviate the illicit drug crisis.' 'The 30 percent tariff on China's exports is still much higher than tariffs on other countries and is still higher than at the turn of this year,' Principal Asset Management chief strategist Seema Shah wrote in an analysis. 'Trade with China is still more expensive than it was six weeks ago, suggesting a sustained negative impact on consumer spending power [and] company profit margins.' Wang Xiaohong, the Chinese security tsar in charge of fentanyl, was reportedly at the trade talks over the weekend in Switzerland, suggesting inroads into that issue are already being made. Activity at U.S. ports has dwindled as a result of the tariffs, with shipments being canceled and workers being furloughed. Port of Los Angeles director Gene Seroka told a radio station last week that they were bracing for a 35-percent drop in volume. 'It's the first arrival of container ships where the tariff was applied just last month,' he said. Business lobbies say that the tariff reduction amounts to the reversal of 'embargo-level' tariffs. The U.S. Chamber of Commerce, said it welcomed news that 'both China and the U.S. will pull back from embargo-level tariffs.' 'Even with this China agreement, tariffs are much higher overall than they were at the beginning of the year, and many businesses … are dealing with growing costs and disruptions,' the group said in a Monday statement. Stocks surged Monday morning on news of the deal, with the S&P 500 index of reaching its March 25 level — the day before stocks started cratering after the announcement of Trump's auto tariffs, and then snowballed on April 2 after the announcement of dozens of country-specific import taxes. The Dow Jones Industrial Average closed with a gain of 1,160 points Monday, rising 2.8 percent on the day The technology-heavy Nasdaq Composite closed up more than 4.4 percent. West Texas Intermediate crude oil prices were more than a $1.20 per barrel, or 1.97 percent, as of 1:35PM U.S. eastern time. The DXY dollar index popped more than 1.5 percent in midday trading, and the VIX volatility index below 20 for the first time since late March.
Epoch Times
08-05-2025
- Business
- Epoch Times
Alberta Pauses US Procurement Policy Tied to Tariff Dispute, Citing Diplomacy
Alberta says it's pausing its new U.S. procurements policy that prevents government departments, agencies, school boards, municipalities, and Crown corporations from purchasing goods and services from U.S. companies. In March, the province said it was asking the organizations not to purchase from the United States following U.S. tariff announcements on Canadian products, which Premier Danielle Smith Service Alberta Minister Dale Nally said U.S. President Donald Trump has since put a hold on further tariffs and the province has decided to pause its procurement prohibition to pursue diplomacy until the U.S.-Mexico-Canada free trade agreement (USMCA) is renegotiated. 'In the spirit of diplomacy Alberta has decided to also pause any further escalations,' Nally said in a statement to The Epoch Times. Nally also said the government would continue with its existing ban on new purchases of U.S. alcohol and video lottery terminals (VLTs) through the Alberta Gaming, Liquor and Cannabis Commission (AGLC). Alberta Opposition NDP critic for jobs, economy and trade, Rhiannon Hoylehas said the government's decision to pause the procurement policy won't help local businesses and demonstrated a lack of leadership. Related Stories 4/10/2025 3/5/2025 'They should be supporting Albertans, supporting Team Canada. Instead, we have this government supporting Team Trump,' she said. The announcement comes after the province launched a buy local campaign to encourage residents to support Alberta-made goods. 'Now, more than ever, we need to shop local and buy made-in-Alberta products,' Minister of Agriculture R.J. Sigurdson said in an April 14 'The next time you are grocery shopping or go out for dinner or a drink with your friends or family, support local to demonstrate your Alberta pride. We are pleased tariffs don't impact the ag industry right now and will keep advocating for our ag industry.' U.S. tariffs of 25 percent are currently in place on Canadian steel, aluminum, and auto manufacturers, and 10 percent tariffs on energy. Tariffs are not imposed on Canadian imports that are covered under the U.S.-Mexico-Canada free trade agreement (USMCA). Alberta Tariff Response Alberta announced its response to U.S. tariffs on March 5, saying it was taking U.S. liquor off shelves, following a similar move by other provinces. Smith said she supported the federal government's measures, which put retaliatory tariffs of 25 percent on $30 billion worth of U.S. good, including steel and aluminum. Canada has also announced a 25 percent tariff on non-USMCA compliant vehicles. However, Smith said she was opposed to Ottawa potentially putting tariffs on oil and gas exports to the United States. She citing it as a reason for not signing a joint statement between the federal government and premiers in January on a united response to tariffs. Carolina Avendano and The Canadian Press contributed to this report.
