Trump's 50%-Tariff in Brazil May Hit Major State's GDP by 2.7%
The duties could affect as many as 120,000 jobs in the region and shrink the state's economy by as much as 2.7%, Freitas said at an event organized by XP Inc in Sao Paulo.
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Bank of Canada widely expected to hold key rate steady amid trade uncertainty
OTTAWA — Avery Shenfeld doesn't think the Bank of Canada will cut its benchmark interest rate at its decision on Wednesday, but if it does, he said it will be a "pleasant surprise." "There's always a chance that they'll surprise with the rate cut," the chief economist of CIBC said. "But I'm not holding out that much hope." Most economists are also expecting the Bank of Canada will hold its policy rate steady at 2.75 per cent for a third consecutive decision later this week. As of Friday afternoon, financial markets were placing odds of a quarter-point rate cut on Wednesday at just seven per cent, according to LSEG Data & Analytics. Stubbornness on the inflation front and surprise strength in the labour market have quashed arguments for further easing since the central bank's June decision. The Canadian economy gained an unexpected 83,000 jobs in June, Statistics Canada reported earlier this month, driving the unemployment rate lower for the first time since January. A few days later, StatCan reported annual inflation ticked up to 1.9 per cent last month while the Bank of Canada's closely watched core inflation figures held stubbornly around three per cent. "Overall, sticky inflation readings, a weakening but relatively resilient economic backdrop and prospects for larger fiscal spending are reasons why we do not expect the BoC will cut again in this cycle," RBC economists Claire Fan and Abbey Xu wrote in a note Friday. But Shenfeld's call for a lower policy rate — CIBC expects two more quarter-point drops before the Bank of Canada is done — isn't based on what's happened in the economy, it's about what's on the horizon. Outside of the June jobs jump, the labour market is still broadly weak with the unemployment rate at 6.9 per cent, Shenfeld noted. He also expects Canada's tariff dispute with the United States led to an economic contraction in the second quarter of the year. All told, there's enough "slack" building in the economy to take steam out of inflation in the months to come, Shenfeld said. The Bank of Canada's own second-quarter business outlook survey released last week suggests that many firms are opting to absorb higher costs from tariffs, rather than pass them on to consumers who may be reining in spending amid economic uncertainty. Shenfeld said that's a sign that tariff impacts "won't extend into a more persistent inflation issue." He said that once the central bank gains enough confidence that any tariff-induced inflation pressures will be short-lived, monetary policymakers should feel confident enough to lower interest rates. "I think at this point they know enough to rule out the worst-case scenario on trade," Shenfeld said. Bank of Canada governor Tiff Macklem has explicitly said monetary policymakers are being less forward-looking than usual in the trade war. The central bank didn't publish a traditional forecast for the economy in its April monetary policy report, instead offering two scenarios for how tariffs could hit the economy. Jimmy Jean, chief economist at Desjardins, said he believes the Bank of Canada will have gathered enough clarity on the trade front to return to formal forecasts in this week's MPR. "The uncertainty is there for everyone to recognize. But there's a point where you've got to sort of, stick your neck out and make the proper caveats," Jean said. Tariff deadlines continue to hover over the Bank of Canada's head — U.S. President Donald Trump has threatened to levy tariffs of 35 per cent on Canadian imports starting Friday if a trade deal isn't reached before then, though CUSMA-compliant goods are expected to be exempt from the duties. Some forecasters, including RBC, expect the Bank of Canada is already done rate cuts and will turn the job of stimulating the economy through the trade war over to federal and provincial governments. While Jean also believes the central bank will opt to hold rates again on Wednesday, he said the bank's next decision in September is an "open possibility" for a cut. Trump's sectoral tariffs targetting Canada's steel, aluminum and copper industries are of particular concern for Ontario and Quebec, Jean said. If those tariffs are sustained, he argued more rate cuts from the Bank of Canada will be warranted to cushion the economic hit. In addition to some sector-specific relief, the federal government has moved in recent months to ramp up Canada's defence and infrastructure funding — spending that could offer fiscal, rather than monetary, support for the economy. But Jean said Desjardins is expecting that lift to come over the ensuing years, not months, opening a window for the Bank of Canada to lower rates in the near-term. "We think, despite those measures being in the pipeline, the Bank of Canada will still in September have a valid reason to cut interest rates," he said. This report by The Canadian Press was first published July 28, 2025. Craig Lord, The Canadian Press 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
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Donald Trump freezes export controls to secure trade deal with China
The US has frozen restrictions on technology exports to China to avoid hurting trade talks with Beijing and help President Donald Trump 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
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Explainer-Why Big Alcohol needs US tariff relief in five charts
By Emma Rumney and Jessica DiNapoli LONDON/NEW YORK (Reuters) -European Union wine and spirits producers could emerge among the few winners of a EU-U.S. trade deal agreed at the weekend that some European officials consider unbalanced. The high-level agreement, which imposes a 15% baseline duty for most EU goods entering the United States, is set to include tariff exemptions for some agricultural products, still to be hammered out. Alcoholic beverages could be among those, according to trade and industry officials. "We are optimistic that in the days ahead this positive meeting and agreement will lead to a return to zero-for-zero tariffs for U.S. and EU spirits products," Distilled Spirits Council President and CEO Chris Swonger said in a statement in response to the U.S.-EU agreement. On Monday, French Trade Minister Laurent Saint Martin also said he expected the spirits sector to be exempted from U.S. tariffs. If confirmed, an exemption would offer a lifeline to alcohol players including the world's biggest spirits maker, Diageo, Pernod Ricard, Remy Cointreau and Campari, all of which are very exposed to vast U.S. market and whose profits have already taken a big hit as consumers spend less on drink. Shares in Pernod, Diageo and Campari initially rose in early trade. But they stood 1.3%, 0.4% and 0.3% lower by 0707 GMT. Shares in Remy fell 2.2%. Alcohol is among the EU's top exports to the United States, worth about 9 billion euros ($10.5 billion) in 2024, according to Eurostat data, with certain products like Remy Martin cognac and champagne required to be produced in specific European regions. About one-third of all exports of Irish whiskey such as Pernod Ricard's Jameson are destined for the United States. Earlier in July, President Donald Trump had threatened a crippling 30% tariff that some industry experts said could stop flows of certain EU goods towards the United States. The United States accounts for about 18% of exports for another exclusively French product, champagne. Of all exports of cognac from its namesake region in France, about 43% end up in the United States. LVMH owns Hennessy Cognac. Remy Cointreau, which makes more than 70% of its sales from French-made cognac, is among the alcohol makers hit hardest by tariffs. It has pegged the hit from tariffs imposed globally at about 45 million euros. For cognac makers, the U.S. tariffs represent a fresh challenge after producers of the drink managed this month to avert the threat of duties of up to around 35% from China. For Spanish and Italian wines, around 14% and 24% of total exports, respectively, are sold in the United States. Beer brewers and makers of popular ready-to-drink cocktails will, however, continue to face tariffs on imported aluminum they may use for cans. Under the EU-U.S. deal struck on Sunday, Washington will continue to impose a levy of 50% on steel and aluminum entering the United States. ($1 = 0.8518 euros) 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
