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Yahoo
5 days ago
- Business
- Yahoo
Canada growth up but Trump tariffs starting to hurt
Canada's latest growth figures, released Friday, were better than expected, but also highlighted weaknesses in the economy as the effects of a trade war launched by US President Donald Trump began to take hold. The nation has been shaken by the mercurial Republican billionaire's repeated tariff threats -- and his targeting of its automotive, steel and aluminum sectors in particular with 25 percent levies. The protectionist policy has fractured longstanding relations between the two neighbors that had seen a progressive melding of their supply chains over decades. The Canadian economy grew by 2.2 percent in the first three months of 2025, as exports surged to try to get ahead of the US tariffs, according to the national statistical agency. Most analysts had expected only modest growth. The rise was largely driven by exports and a buildup in business inventories mostly by wholesalers, said Statistics Canada. But lower household spending in the quarter suggests the "domestic economy looked very frail," Desjardins analyst Royce Mendes said in a research note. He noted the "boost in outbound shipments was the result of US buyers trying to get ahead of tariffs" imposed by Trump. At the same time, domestic demand "stagnation points to a disappointing underlying growth rate relative to the already-tempered expectations," he said. TD Economics senior economist Andrew Hencic agreed, saying: "The top line measure would suggest the Canadian economy continues to chug along at a decent clip, but digging beneath the surface suggests otherwise." "Trade tensions and the uncertainty they heaped on the economy have started to show through on activity," he said, with consumers pulling back on spending. Trump had announced -- then halted, pending negotiations -- several levies on Canadian imports into the United States, while Canada hit back with counter tariffs. - 'Worrying signs' - Canada, whose economy is heavily reliant on trade, sends about 75 percent of its exports to its southern neighbor. According to Statistics Canada, exports led by passenger vehicles and industrial machinery rose 1.6 percent in the first quarter of 2025. Imports also increased in the first three months of the year. Household spending, however, slowed 0.3 percent after rising in the last three months of 2024. The GDP figure is the last economic indicator before Canada's central bank on Wednesday makes its next interest rate announcement. That decision is going to be "a close call," commented Nathan Janzen of RBC Economics. He predicted the Bank of Canada would continue to hold its key lending rate steady. The central bank in April paused a stream of recent rate cuts at 2.75 percent. Janzen said the economy has shown itself to be "relatively resilient relative plunging consumer and business confidence." But he acknowledged "worrying signs of softening" in the labor market, with tens of thousands of manufacturing jobs shed last month. Preliminary estimates indicate the economy would expand only slightly in April at the start of the second quarter. Hencic said this, combined with rising unemployment, suggests that "domestic demand has all but petered out." But he added, "With the tailwinds from last year's rate reductions fading, the Bank of Canada should have room to deliver two more rate reductions this year and give the economy a bit more breathing room." Prime Minister Mark Carney, elected at the end of April, promised to radically transform the Canadian economy, the world's ninth largest economy, by focusing particularly on internal trade and energy. But he faces pressures to act quickly as several auto companies have already announced temporary production reductions in one of Canada's largest industrial sectors. amc/st 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
Int'l Business Times
5 days ago
- Business
- Int'l Business Times
Canada Growth Up But Trump Tariffs Starting To Hurt
Canada's latest growth figures, released Friday, were better than expected, but also highlighted weaknesses in the economy as the effects of a trade war launched by US President Donald Trump began to take hold. The nation has been shaken by the mercurial Republican billionaire's repeated tariff threats -- and his targeting of its automotive, steel and aluminum sectors in particular with 25 percent levies. The protectionist policy has fractured longstanding relations between the two neighbors that had seen a progressive melding of their supply chains over decades. The Canadian economy grew by 2.2 percent in the first three months of 2025, as exports surged to try to get ahead of the US tariffs, according to the national statistical agency. Most analysts had expected only modest growth. The rise was largely driven by exports and a buildup in business inventories mostly by wholesalers, said Statistics Canada. But lower household spending in the quarter suggests the "domestic economy looked very frail," Desjardins analyst Royce Mendes said in a research note. He noted the "boost in outbound shipments was the result of US buyers trying to get ahead of tariffs" imposed by Trump. At the same time, domestic demand "stagnation points to a disappointing underlying growth rate relative to the already-tempered expectations," he said. TD Economics senior economist Andrew Hencic agreed, saying: "The top line measure would suggest the Canadian economy continues to chug along at a decent clip, but digging beneath the surface suggests otherwise." "Trade tensions and the uncertainty they heaped on the economy have started to show through on activity," he said, with consumers pulling back on spending. Trump had announced -- then halted, pending negotiations -- several levies on Canadian imports into the United States, while Canada hit back with counter tariffs. Canada, whose economy is heavily reliant on trade, sends about 75 percent of its exports to its southern neighbor. According to Statistics Canada, exports led by passenger vehicles and industrial machinery rose 1.6 percent in the first quarter of 2025. Imports also increased in the first three months of the year. Household spending, however, slowed 0.3 percent after rising in the last three months of 2024. The GDP figure is the last economic indicator before Canada's central bank on Wednesday makes its next interest rate announcement. That decision is going to be "a close call," commented Nathan Janzen of RBC Economics. He predicted the Bank of Canada would continue to hold its key lending rate steady. The central bank in April paused a stream of recent rate cuts at 2.75 percent. Janzen said the economy has shown itself to be "relatively resilient relative plunging consumer and business confidence." But he acknowledged "worrying signs of softening" in the labor market, with tens of thousands of manufacturing jobs shed last month. Preliminary estimates indicate the economy would expand only slightly in April at the start of the second quarter. Hencic said this, combined with rising unemployment, suggests that "domestic demand has all but petered out." But he added, "With the tailwinds from last year's rate reductions fading, the Bank of Canada should have room to deliver two more rate reductions this year and give the economy a bit more breathing room." Prime Minister Mark Carney, elected at the end of April, promised to radically transform the Canadian economy, the world's ninth largest economy, by focusing particularly on internal trade and energy. But he faces pressures to act quickly as several auto companies have already announced temporary production reductions in one of Canada's largest industrial sectors.
France 24
5 days ago
- Business
- France 24
Canada growth up but Trump tariffs starting to hurt
The nation has been shaken by the mercurial Republican billionaire's repeated tariff threats -- and his targeting of its automotive, steel and aluminum sectors in particular with 25 percent levies. The protectionist policy has fractured longstanding relations between the two neighbors that had seen a progressive melding of their supply chains over decades. The Canadian economy grew by 2.2 percent in the first three months of 2025, as exports surged to try to get ahead of the US tariffs, according to the national statistical agency. Most analysts had expected only modest growth. The rise was largely driven by exports and a buildup in business inventories mostly by wholesalers, said Statistics Canada. But lower household spending in the quarter suggests the "domestic economy looked very frail," Desjardins analyst Royce Mendes said in a research note. He noted the "boost in outbound shipments was the result of US buyers trying to get ahead of tariffs" imposed by Trump. At the same time, domestic demand "stagnation points to a disappointing underlying growth rate relative to the already-tempered expectations," he said. TD Economics senior economist Andrew Hencic agreed, saying: "The top line measure would suggest the Canadian economy continues to chug along at a decent clip, but digging beneath the surface suggests otherwise." "Trade tensions and the uncertainty they heaped on the economy have started to show through on activity," he said, with consumers pulling back on spending. Trump had announced -- then halted, pending negotiations -- several levies on Canadian imports into the United States, while Canada hit back with counter tariffs. 'Worrying signs' Canada, whose economy is heavily reliant on trade, sends about 75 percent of its exports to its southern neighbor. According to Statistics Canada, exports led by passenger vehicles and industrial machinery rose 1.6 percent in the first quarter of 2025. Imports also increased in the first three months of the year. Household spending, however, slowed 0.3 percent after rising in the last three months of 2024. The GDP figure is the last economic indicator before Canada's central bank on Wednesday makes its next interest rate announcement. That decision is going to be "a close call," commented Nathan Janzen of RBC Economics. He predicted the Bank of Canada would continue to hold its key lending rate steady. The central bank in April paused a stream of recent rate cuts at 2.75 percent. Janzen said the economy has shown itself to be "relatively resilient relative plunging consumer and business confidence." But he acknowledged "worrying signs of softening" in the labor market, with tens of thousands of manufacturing jobs shed last month. Preliminary estimates indicate the economy would expand only slightly in April at the start of the second quarter. Hencic said this, combined with rising unemployment, suggests that "domestic demand has all but petered out." But he added, "With the tailwinds from last year's rate reductions fading, the Bank of Canada should have room to deliver two more rate reductions this year and give the economy a bit more breathing room." Prime Minister Mark Carney, elected at the end of April, promised to radically transform the Canadian economy, the world's ninth largest economy, by focusing particularly on internal trade and energy. But he faces pressures to act quickly as several auto companies have already announced temporary production reductions in one of Canada's largest industrial sectors. © 2025 AFP
Time of India
06-05-2025
- Business
- Time of India
Is Canada finally breaking free from US trade dominance Amid a brewing trade war?
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Ottawa, May 06, 2025 -Canada traded significantly less with the United States in March but made up for it at the start of a trade war between neighbors with increased overseas shipments, official data showed fresh trade figures come as Prime Minister Mark Carney was to meet with President Donald Trump in Washington to discuss strained trade and security United States imposed broad tariffs on imports of Canadian goods at the beginning of March before announcing several reductions and exemptions, while Canada hit back with counter a result, Statistics Canada said, exports to the United States "were down significantly for the month," about 6.6 percent."But this decrease was almost entirely offset by a strong increase in exports to countries other than the United States," the national statistical agency said, pointing to a 24.8-percent surge in shipments jump in exports to those other countries fueled the second-largest percentage increase on record, it from the United States, meanwhile, fell 2.9 percent amid souring public sentiment toward Canada's historical ally and largest trading last week won reelection on a pledge to stand up to the US president's tariffs and threats to annex said Friday "our old relationship (with the US) based on steadily increasing integration is over" and vowed to diversify trade to Statistics Canada, total exports in March fell 0.2 percent mainly on lower prices, while total imports were down 1.5 a result, Canada's trade deficit went from Can$1.4 billion (US$1.0 billion) in February to Can$506 million (US$367 million) in trade surplus with the United States, meanwhile, narrowed to Can$8.4 billion (US$6.1 billion).The month saw higher exports of gold to the United Kingdom, crude oil to the Netherlands and various products to of motor vehicles and parts also surged ahead of US tariffs on the auto sector implemented in were, however, fewer shipments of pharmaceuticals and uranium to the United States, and pork to Asian gas exports also in steel and aluminum was mixed in the face of 25 percent US tariffs and Canadian counter of steel products fell, but exports of aluminum products rose for a fourth consecutive month. Imports of steel products were also down while imports of aluminum products expect the full impacts of the tariffs are still to be should "brace for increasing headwinds to trade as the worst of the trade conflict is expected to take place over the coming quarters," TD Economics analyst Marc Ercolao said in a research note.
CBC
30-04-2025
- Business
- CBC
Now comes the hard part for Mark Carney
Even with the dust still settling on the results of the federal election, the clock has already begun ticking on Mark Carney's promises to unite and build the Canadian economy. "We will need to do things previously thought impossible at speeds we haven't seen in generations," he said in his victory speech early Tuesday morning. Carney, a former central banker and a first-time politician, has campaigned as a calm, steady hand — an experienced economist who knows how to navigate a crisis. At the core of that campaign was a promise to build the economy in a way that would decrease reliance on the U.S. and offset the potentially catastrophic impact of Donald Trump's tariffs. "It's time to build new trade and energy corridors working in partnership with the provinces [and] territories and Indigenous Peoples," Carney told Liberal supporters. "It's time to build hundreds of thousands of not just good jobs, but good careers in the skilled trades. It's time to build Canada into an energy superpower in both clean and conventional energy." But that will be easier said than done. "We don't have time. We need to get going. The world's not going to wait," said Goldy Hyder, president and CEO of the Business Council of Canada. A clear issue There are dozens of open letters and lists of demands from industry associations and business alliances. At or near the top of all of them is a push to bring down interprovincial trade barriers. Despite Canadian businesses taking issue with these barriers for years, the political will to fix the problem only truly developed in the face of Trump's tariffs and threats to annex Canada. This was evident on Tuesday morning, as the results from the election were becoming clear. News emerged from the White House of a potential change in tariff policy that would exert yet more pressure on automakers to move their parts supply chains into the United States (and out of Canada). Trump signed the new plan via executive order on Tuesday afternoon. The crisis awaiting the new Liberal government is actually a series of many different problems. The tariffs and the trade war pose one whole set of challenges. But they also expose underlying weakness that has been building in Canada's economy for years. For his part, Carney has said he's committed to seeing more open, freer trade in this country by Canada Day. And Ottawa had already begun the process of breaking down many barriers earlier this year. "The point is that we can give ourselves far more than the Americans can ever take away," he said in his speech. Economists say there are a whole host of ways to grow the economy. And many mention the fact that there is already fairly widespread consensus on what needs to be done. A TD Economics report highlights what it called "significant alignment" in areas like defence spending, resource development, tariffs, housing and tax policies. "And now the rubber hits the road on collaboration and negotiations, with Liberals caught between the demands of the U.S. administration and those of domestic politics," wrote TD's chief economist Beata Caranci along with senior economists Andrew Hencic and Francis Fong. Further tensions Minority governments often make that kind of work more difficult, but the TD Economics team says with 84.9 per cent of voting Canadians throwing their support behind either the Conservatives or the Liberals, they also sent the message that they expect those parties to get along. After all, there was significant policy overlap in the campaign. The Conservatives complained that the Liberals adopted a number of the party's key platform ideas ranging from cutting income taxes and the consumer carbon tax to increasing defence spending. "It's crucial that the broader interests of Canada prevail," the TD team wrote. The pressure on the new government will be enormous. Canadians expect Carney to make good on his promises. And industry associations are already highlighting the commitments he made throughout the campaign. "This election marked a defining shift in Canada's energy future," wrote Mark Scholz, CEO of the Canadian Association of Energy Contractors in a statement ostensibly congratulating the new Prime Minister. "Canadians spoke clearly: The debate is no longer whether to develop our natural resources, but how swiftly and boldly we can advance." At the same time, about eight million Canadians voted for the Conservatives, and Western Canada's anger and dissatisfaction with the Liberals is reaching a fevered pitch. Alberta Premier Danielle Smith has said multiple times she won't let the status quo continue. "We will no longer tolerate having our industries threatened and our resources landlocked by Ottawa," she wrote in a social media post after the election. The premier went on to say Albertans will discuss their province's future in the weeks and months ahead. "[We will] assess various options for strengthening and protecting our province against future hostile acts from Ottawa, and to ultimately choose a path forward," wrote the Alberta premier. But the solution to the economic problems just may be the solution to the political problems, as well. If Carney can make good on his promise and actually expand the economy, turn Canada into an energy superpower, expand hiring and increase wages, much of the case against him will be diminished. If he fails to deliver on those promises, the cascading series of crises may well compound and get worse.
