Latest news with #US-Canada-Mexico
Yahoo
03-04-2025
- Business
- Yahoo
Stocks of McDonald's and other fast food giants pop as reciprocal tariffs sink the wider market
With Trump's reciprocal tariffs roiling the markets, investors are looking to Happy Meals for a smile. On Thursday, shares of McDonald's (MCD), Yum! Brands (YUM), and Restaurant Brands International (QSR) all popped while the wider market plunged. The Golden Arches is up 2%, while Yum (KFC, Pizza Hut, Taco Bell) and RBI (Burger King, Tim Hortons, Popeyes) are up 2% and 1.4%, respectively. The S&P 500 dropped nearly 5% amid the selloff. Fast food chains could benefit as investors try "to shield their portfolio from tariff risk and uncertainty," BTIG analyst Peter Saleh told Yahoo Finance over the phone. "Generally, the vast majority of the products are sourced domestically," Saleh said, with a modest amount of items like produce, beef, and wheat imported from Canada and Mexico. As of April 5, all imports will face a baseline tariff of 10%. On April 9, about 60 countries will get a higher rate. China is facing a 34% reciprocal tariff on top of the 20% tariff already in place, making it a total of 54%. But for Canada and Mexico, goods compliant with the US-Canada-Mexico agreement (USMCA) are exempt form duties, while non-compliant goods are charged 25%. Roughly 80% of key food categories imported from those two countries are USMCA compliant, per TD Cowen's Andrew Charles, who called the exemption a win for the food industry. The fast food giants also have the benefit of the franchise model, in contrast to many fast casual restaurants like Chipotle (CMG), Cava (CAVA), Sweetgreen (SG), and Shake Shack (SHAK). Shares of those four sank 4%, 7%, 13%, and 12%,. "If everybody's sales are going to be hurt, the earnings are going to be hurt less for the franchise business models," Saleh noted. Bernstein analyst Danilo Gargiulo and Saleh both have Neutral rating on McDonald's and Yum! Brands, despite perception the chains could be more resilient when consumers tighten their belts. "You're not getting a lot of earnings growth out of McDonald's, and you're paying 25 times earnings growth that ... does not seem like a good value proposition," Saleh said. The companies' efforts to compete on value, with Taco Bell increasing its value mix from 13% to 18%, and McDonald's bringing its value mix to more than one-third, could hit its profits. "[One-third] is too much, in my opinion ... they need to bring it down to more reasonable levels and start promoting more full price items," Saleh added. Phil Kafarakis, CEO of the Food Away From Home Association (IFMA), told Yahoo Finance that throwing these tariffs "on top of everything" will likely cause "another round of reviews on pricing." He predicts fast food restaurants like McDonald's and Wendy's (WEN) will continue to push promotional activity, like the $5 meal deals, to encourage visits. "It's going to be a margin squeeze ... there's no question about it," Kafarakis said. "It's just a matter of [the] frequency of promotions and who's going to pass [the costs] on and who's not." For fast casual players, investors might be pricing in the idea of a recession and a "significant contraction in demand going forward," noted Gargiulo. EY chief economist Gregory Daco increased the odds of recession from 40% to 60% on Thursday. "Our initial assessment of the economic impact of the new tariff measures points to a substantial hit to the US and global economy, with consumer spending possibly retrenching and a risk that the economy could fall into a recession," he wrote in a post on LinkedIn. But fast casual restaurants are also mostly insulated from the impact of tariffs. Vast majority of its international sourcing comes from Canada and Mexico, per Charles. William Blair analyst Sharon Zackfia predicts that fast-casual players will end up outperforming as price gaps continue to shrink between them and their fast food peers. "Overall promotional intensity has generally remained elevated in an effort to woo back customers after several years of outsized price hikes, and sales trends remain healthiest in fast casual, which appears to be benefiting from both trade-down from casual dining and trade-up from fast food as the price gap has narrowed," she wrote. — Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@ Click here for all of the latest retail stock news and events to better inform your investing strategy Sign in to access your portfolio
Yahoo
03-04-2025
- Automotive
- Yahoo
Canada imposing 25% tariff on some US auto imports
Canada said it would impose a 25 percent tariff on some autos imported from the United States, retaliating against President Donald Trump's levies that came into affect on Thursday. Prime Minister Mark Carney announced "25 percent tariffs on all vehicles imported from the United States that are not compliant with CUSMA," using the Canadian acronym for an existing North America free trade agreement. It was not immediately clear what percentage of US vehicle imports would be impacted. Canada was largely spared from the sweeping global tariffs Trump announced Wednesday, as Washington granted an exemption to goods compliant with the US-Canada-Mexico free trade agreement, which covers most products. But Canada, which is America's largest trading partner, is still facing steel, aluminum and other products in addition to autos. Carney said Trump's trade war "will rupture the global economy." "The system of global trade anchored in the United States that Canada has relied on since the end of the Second World War... is over," Carney said. "The 80 year period when the United States embraced the mantle of global economic leadership, forged alliances rooted in trust and mutual respect, championed the free and open exchange of goods and services is over," Carney added, calling the development "a tragedy." Carney and Trump spoke by phone last week. They agreed Washington and Ottawa should negotiate the future of bilateral trade after Canada's April 28 election. bs/md
Saudi Gazette
05-03-2025
- Business
- Saudi Gazette
Trudeau hits out at 'dumb' tariffs as Trump warns of further hikes against Canada
TORONTO — Prime Minister Justin Trudeau slammed Donald Trump's sweeping tariffs on Canada, calling it a "very dumb thing to do" and vowed to conduct a "relentless fight" to protect its economy. Trump has imposed 25% tariffs on products entering the US from Canada and Mexico, and has increased a levy on goods coming from China. The Canadian prime minister announced retaliatory tariffs on US exports and warned that a trade war would be costly for both countries. But Trump pushed even further in a post on Truth Social, saying: "Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!" Trudeau accused the US president of planning "a total collapse of the Canadian economy because that will make it easier to annex us". "That is never going to happen. We will never be the 51st state," he told reporters on Tuesday. "This is a time to hit back hard and to demonstrate that a fight with Canada will have no winners." He said that Canada's main goal remains to get the tariffs lifted so that they "don't last a second longer than necessary". Trump said he is protecting US jobs and manufacturing, and trying to prevent illegal migration and drug trafficking. The US president said his goal is to clamp down on the powerful opioid fentanyl; he has variously blamed other countries for the drug's arrival in the US. Responding to the accusations, Trudeau said on Tuesday there was "no justification" for the new tariffs, because less than 1% of the fentanyl intercepted at the US border comes from Canada. Trudeau's words were echoed by Mexican President Claudia Sheinbaum, who said there was "no motive, no reason, no justification" for Trump's move. Speaking on Tuesday, she too vowed to issue her own "tariff and non-tariff measures" — but said further details would be given on Sunday. Trump's tariffs are likely to push up prices for consumers in the US and abroad, said John Rogers, an economics professor at American International University. The items most likely to be affected the soonest are food — the fruits, vegetables and other produce the US imports from Mexico — followed by the large amounts of oil and gas imported from Canada, Prof Rogers said. "Prices could go up pretty soon", Prof Rogers warned, though he was reluctant to say by exactly how much or how quickly. "We are in pretty uncharted territory," he told the BBC. The bigger concern for prof Rogers was the potential damage he said was being done to America's longstanding trade partners. "This is kind of sticking your finger in the eye of your neighbor," he said, adding that, in a potential US-Canada-Mexico trade war, "everybody is a loser". The three countries targeted are America's top trading partners, and the tit-for-tat measures also prompted fears of that very trade war. "There's no way you can win a trade war. Everybody suffers, because everybody's just going to wind up paying higher prices and sacrificing quality," Prof Rogers said. Tariffs are a tax on imports from other countries, designed to protect against cheaper competition from elsewhere, and boost businesses and jobs at home. Canada's retaliatory measures include a 25% reciprocal tariff that will be imposed on C$155bn (US$107bn; £84bn) of American goods. Canada's Immigration Minister Marc Miller warned that as many as a million jobs in Canada were at risk if the tariffs were implemented, given how intertwined trade was between the two countries. "We can't replace an economy that is responsible for 80% of our trade overnight and it's going to hurt," he said on Monday. Speaking to the AFP news agency, a car manufacturing employee in the Canadian province of Ontario said people were indeed "pretty scared" of being laid off. "I just bought my first house," Joel Soleski said. "I might have to look for work elsewhere." The sector is one that could be badly affected by the new tariffs regime in North America. Car parts may cross US-Canada border several times during the manufacturing process, and so might be taxed on multiple occasions. Ontario Premier Doug Ford, whose province is home to Canada's auto manufacturing industry, told reporters on Tuesday that he anticipates assembly plants will "shut down on both sides of the border" as a result of the tariffs. The tariffs were called "reckless" by the Canadian Chamber of Commerce, whose president Candace Laing cautioned that the move would force both Canada and the US towards "recession, job losses and economic disaster". Ms Laing warned they would also increase prices for Americans, and force US businesses to find alternate suppliers that she said "are less reliable than Canadian ones". Canadian provincial leaders have vowed their own responses. Ford of Ontario mooted the possibility of cutting off Canadian electricity supplies and exports of high-grade nickel to the US, as well as putting an export levy of 25% on electricity sent to power homes in Michigan, New York and Minnesota. Canada exports enough electricity to power some six million American homes. Ontario and other provinces have also moved to remove US-made liquor off their shelves. In Nova Scotia, Premier Tim Houston said his province will ban American companies from bidding on provincial contracts, as will Ontario. Ford also announced that a C$100m ($68m; £55.1) contract with Elon Musk's satellite internet company Starlink will be canceled. Meanwhile China — which now faces tariffs of 20% after Trump doubled an earlier levy — has vowed to fight any trade war to the "bitter end". It has announced its own counter-measures — including tariffs on a range of US agricultural and food products. — BBC
Telegraph
25-02-2025
- Business
- Telegraph
Trump ‘greatest threat to Canada since Second World War', PM contender warns
Donald Trump is the 'biggest threat to Canada since World War Two', a leading candidate to replace Justin Trudeau as prime minister warned on Monday. Chrystia Freeland, who served as Mr Trudeau's deputy prime minister before resigning in December 2024, made the claim during a televised French-language debate between the candidates that are vying to be the next leader of the ruling Liberal Party. The debate was dominated by Mr Trump and his threats to annex or slap punishing tariffs on Canada, with contenders attempting to present themselves as the best choice to take on the new US president. Ms Freeland, who helped negotiate the US-Canada-Mexico trade deal during the first Trump administration, said the US president had at that time vowed to wage economic war against Canada. Referring to Mr Trump urging Canada to become part of America, she said: 'But this time Trump's threats are worse – he wants to make Canada the 51st state. 'That is why he is supporting Vladimir Putin's criminal attempt to redraw Ukraine's borders. Trump wants to redraw our borders too.' The former deputy prime minister added: 'Trump represents the biggest threat to Canada since World War Two.' Mark Carney, the former Bank of England governor who polls indicate is the front-runner, said Mr Trump would never succeed in making good his threat to make Canada a part of the United States. He said: 'At this moment Canada is facing the worst crisis of our lives... I know how to handle crises.' Mr Carney, 59, headed the Bank of England during the Brexit vote and the Bank of Canada during the 2008-2009 financial meltdown. He said: 'We have to recognise that the Trump of today, he's not the same Trump he was before. He's more unilateralist, more isolationist, more aggressive. 'He used to want a piece of our markets. Now he wants our country.' The US president announced 25 per cent tariffs on imports from Canada shortly after taking office, but later implemented a last-minute halt to the levies for a month as talks continued. The pause ends next Tuesday and Mr Trump said earlier on Monday that the tariffs would go ahead as planned. Canada sends 75 per cent of its goods and services exports to the United States and would fall into a recession if the tariffs are applied. Ms Freeland's resignation after nine years in the cabinet triggered a crisis that eventually forced Mr Trudeau to announce last month that he would step down. In her resignation statement, Ms Freeland accused Mr Trudeau of 'political gimmicks'. The new leader, who will become prime minister, will be named on March 9. The next Canadian election must be held by Oct 20 this year and, until recently, the Conservatives, who are the official opposition, looked set for an easy win after more than nine years of Liberal rule. But the race now is much closer, thanks to Liberals positioning themselves around how to deal with the US president. Pierre Poilievre
Yahoo
25-02-2025
- Business
- Yahoo
Trump ‘greatest threat to Canada since Second World War', PM contender warns
Donald Trump is the 'biggest threat to Canada since World War Two', a leading candidate to replace Justin Trudeau as prime minister warned on Monday. Chrystia Freeland, who served as Mr Trudeau's deputy prime minister before resigning in December 2024, made the claim during a televised French-language debate between the candidates that are vying to be the next leader of the ruling Liberal Party. The debate was dominated by Mr Trump and his threats to annex or slap punishing tariffs on Canada, with contenders attempting to present themselves as the best choice to take on the new US president. Ms Freeland, who helped negotiate the US-Canada-Mexico trade deal during the first Trump administration, said the US president had at that time vowed to wage economic war against Canada. Referring to Mr Trump urging Canada to become part of America, she said: 'But this time Trump's threats are worse – he wants to make Canada the 51st state. 'That is why he is supporting Vladimir Putin's criminal attempt to redraw Ukraine's borders. Trump wants to redraw our borders too.' The former deputy prime minister added: 'Trump represents the biggest threat to Canada since World War Two.' Mark Carney, the former Bank of England governor who polls indicate is the front-runner, said Mr Trump would never succeed in making good his threat to make Canada a part of the United States. He said: 'At this moment Canada is facing the worst crisis of our lives... I know how to handle crises.' Mr Carney, 59, headed the Bank of England during the Brexit vote and the Bank of Canada during the 2008-2009 financial meltdown. He said: 'We have to recognise that the Trump of today, he's not the same Trump he was before. He's more unilateralist, more isolationist, more aggressive. 'He used to want a piece of our markets. Now he wants our country.' The US president announced 25 per cent tariffs on imports from Canada shortly after taking office, but later implemented a last-minute halt to the levies for a month as talks continued. The pause ends next Tuesday and Mr Trump said earlier on Monday that the tariffs would go ahead as planned. Canada sends 75 per cent of its goods and services exports to the United States and would fall into a recession if the tariffs are applied. Ms Freeland's resignation after nine years in the cabinet triggered a crisis that eventually forced Mr Trudeau to announce last month that he would step down. In her resignation statement, Ms Freeland accused Mr Trudeau of 'political gimmicks'. The new leader, who will become prime minister, will be named on March 9. The next Canadian election must be held by Oct 20 this year and, until recently, the Conservatives, who are the official opposition, looked set for an easy win after more than nine years of Liberal rule. But the race now is much closer, thanks to Liberals positioning themselves around how to deal with the US president. Pierre Poilievre, the Conservative leader, has been compared with the US president after harnessing populist ideas and promising similar policies such as cuts to the foreign aid budget. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
