Latest news with #CUSMA-compliant
Edmonton Journal
2 days ago
- Business
- Edmonton Journal
Canada's trade talks with U.S. in 'intense phase' after European Union makes deal ahead of deadline
Article content Carney and other Canadian officials have been downplaying expectations that a deal will be made by Friday. Article content Most of the goods Canada sends to the U.S. are CUSMA-compliant and won't be affected by the 35 per cent duties. The Canadian economy is still being slammed by Trump's Section 232 tariffs on steel, aluminum and automobiles, and will be hit by copper tariffs the president has said will take effect by the week's end. Article content So far, Trump's trade deals 'are really bad omens for Canada,' said William Pellerin, a trade lawyer and partner at the firm McMillan LLP. Article content '(It shows) that the tariffs, particularly the sectoral tariffs, are stickier than we would have thought,' Pellerin said. 'If none of those countries were able to secure a drop in the sectoral tariffs, that is certainly bad news.' Article content Those Section 232 duties are a key target for Canadian negotiators and Pellerin said it's unlikely any deal will be struck by Ottawa if they remain at their current levels. Article content Article content While there are similarities between the Canada-U.S. negotiations and those involving Europe, Carney said there are also many differences. While Europe is looking to end its reliance on Russian energy, Carney said Canada is a reliable supplier of energy to the United States. Article content The prime minister said negotiations remain complex but 'there is a landing zone that's possible.' Article content 'But we have to get there,' he said. Article content The EU agreement also averts significant retaliatory duties from a major United States customer — meaning that if Canada can't reach a deal with Washington, it would be more isolated if it attempts to retaliate against the U.S. Article content Canada and China have implemented retaliatory tariffs in response to Trump's trade war but, to allow talks to continue, Ottawa didn't move forward with additional duties. Article content Ontario Premier Doug Ford said Monday he supports a dollar-for-dollar tariff response, particularly to Trump's treatment of Canada's steel and aluminum industry. Article content Article content 'I'm confident with Prime Minister Carney, I know he's going to do his very best to get a deal,' Ford said. 'But I don't trust President Trump.' Article content B.C. Premier David Eby said Canada is in a 'different position' than the European Union or Japan, given the deeply integrated nature of North American supply chains. Article content 'We are a reliable partner, we are a good partner, but we also won't get kicked around,' he said. Article content Sands said Carney's recent move to limit imports of foreign steel into Canada will help shore up the domestic market during the tariff tumult while also avoiding the ire of the Trump administration. Article content The prime minister recognizes you can engage in retaliation, Sands said, but 'it doesn't bring you much joy.' He said there are other actions, such as import quotas, that would better protect Canadian markets.
Yahoo
25-06-2025
- Business
- Yahoo
Trump's tariff war: Canada expected to keep NAFTA 2.0 'carve-out' in new U.S. trade deal
A new Canada-U.S. trade deal will likely carry forward the Canada-United States-Mexico Agreement (CUSMA) tariff exemptions currently shielding most Canadian exports from American tariffs today, says Deloitte Canada chief economist Dawn Desjardins. She's optimistic that Canada can avoid the economic hit that may be in store for other U.S. trading partners. U.S. President Donald Trump has set July 9 as the deadline for countries to ink a trade deal in order to avoid his 'Liberation Day' tariffs, many of which are higher than the baseline 10 per cent levy the White House has applied to most countries. For Canada, Prime Minister Mark Carney and Trump agreed on the sidelines of the recent G7 meeting in Alberta to strike a deal by July 21. 'Our baseline view assumes that at a minimum, we continue to operate with our CUSMA carve-outs. Meaning, the vast majority of Canadian goods that we sell into the U.S. will continue to be tariff-free,' Desjardins told Yahoo Finance Canada in an interview earlier this week. 'The sounds we're hearing seem to be moving in the right direction. Obviously, [I have] no inside information. It's just an assumption that we will not be severely hit by 25 per cent tariffs across the board.' While Trump has ramped up tariffs on Canadian steel and aluminum, as well as the auto sector, economists say Canada achieved the lowest U.S. tariff rate among major trade partners when CUSMA-compliant goods were exempted on April 2. On Wednesday, RBC Economics estimated that roughly 86 per cent of Canadian exports should ultimately be able to access the U.S. market duty free under current trade rules. RBC expects the share of CUSMA-compliant trade to rise rapidly from 50 per cent in March. Trump signed CUSMA, also known as United States-Mexico-Canada Agreement, into U.S. law on Jan. 29, 2020. The deal was dubbed 'NAFTA 2.0' or 'New NAFTA,' as it replaced the North American Free Trade Agreement implemented in 1994. 'I'm a little surprised that we were already front and centre in terms of the initial tariffs being applied to Canada, given that we have that trade agreement,' Desjardins said. 'The element of trust that we have with our biggest trading partner has been quite damaged by this.' Deloitte Canada's latest economic forecast, published on Wednesday, calls for that damage to result in a 'modest recession' in the second and third quarters of the year. Ontario and Quebec are due to be hardest hit, given their weight in the manufacturing sector. Statistics Canada's latest GDP reading shows the economy grew at an annual rate of 2.2 per cent in the first quarter. Earlier this month, the Bank of Canada warned the economy will be "substantially weaker" in the second quarter of 2025, versus the start of the year as the full impact of U.S. import tariffs hits Canadian businesses. Deloitte sees Canada's real GDP growth rising 1.1 per cent in 2025, before accelerating to 1.6 per cent in 2026. 'As we move forward, and we have more clarity, whatever clarity looks like, but more clarity on our relationship with the U.S., and how the [Canadian] government is actually going to get into action, these are going to be the things that lift us as we go into 2026,' Desjardins said. Canadians will have to wait until the federal government's fall budget for more details on Carney's plans to spend billions on building housing inventory, advancing infrastructure projects, and investing in Canada's military. 'There's a lot in the hopper,' Desjardins added. 'There are just so many underlying factors at this stage that could have either a temporary or short-term impact, or be more persistent.' Deloitte Canada's optimistic take on rebuilding Canada-U.S. trade links comes on the heels of a similar analysis by the Canadian arm of fellow accounting giant PricewaterhouseCoopers (PwC) released last week. 'Canada is maybe in the best position of any other country,' Michael Dobner, PwC Canada's national leader of economics and policy practice, told Yahoo Finance Canada last Tuesday. 'The negotiation between Canada and the U.S. may further cement Canada's position over other countries as an exporter to the U.S.' Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on X @jefflagerquist. Download the Yahoo Finance app, available for Apple and Android. Sign in to access your portfolio
Winnipeg Free Press
25-06-2025
- Business
- Winnipeg Free Press
Trade clarity to help Canada's economy rebound after modest recession: Deloitte
OTTAWA – Some economists are putting an increasingly optimistic slant on Canada's tariff dispute with the United States, arguing the economy should be able to avoid 'worst-case' scenarios from the trade war. That doesn't mean the Canadian economy gets off scot-free — a new forecast published by Deloitte Canada on Wednesday calls for a modest recession to hit in the second and third quarters of the year as uncertainty and weakness caused by tariffs start to bite. 'We do think the economy really is going to be considerably slower,' said Dawn Desjardins, chief economist at Deloitte Canada. After a surprisingly strong first quarter that saw many businesses rush their orders to get ahead of looming tariffs, Canadian exports were already showing signs of a steep decline in April. Weakness in the manufacturing side of the labour market is expected to broaden in the months ahead, Deloitte Canada said. The unemployment rate is forecast to rise to 7.3 per cent by the fall from May's level of seven per cent. But Desjardins said this downturn could be much worse if Canada hadn't secured tariff exemptions for CUSMA-compliant exports in early negotiations with the United States. U.S. President Donald Trump's move to double steel and aluminum tariffs to 50 per cent earlier this month means those sectors are still set to take steeper hits, she said, particularly if Canada levies more reciprocal tariffs at the end of a 30-day negotiation deadline in July. Deloitte said parts of eastern and Central Canada, as well as British Columbia, will see subdued growth this year from the tariff dispute while the prairie provinces and Newfoundland and Labrador will see their output rise, thanks largely to energy exports. Overall, Desjardins said the status quo — if maintained — does not mark the 'worst-case outcome' for Canada's economy that some might have feared a few months ago when tariff talks were ramping up. Deloitte expects that, even with two negative quarters, Canada will post real GDP growth of 1.1 per cent this year. That would accelerate to 1.6 per cent in 2026 — not headline shattering growth by any means, but better than a protracted downturn. Unemployment would also drop back below seven per cent early next year, the report said. Deloitte is not the only one bringing a bit of optimism to the forecast. RBC published a report June 13 that also focuses on Canada's upside risks — economist shorthand for ways things might turn out for the better — amid what it called a 'gloomy' outlook on the trade war to date. 'While Canada's economic path forward remains challenging, it appears considerably less treacherous than it did just a few months ago — a narrative that has yet to permeate the Canadian psyche,' the RBC report read. Consumer and business confidence has taken a hit as Canadians wait for an outcome from trade negotiations with the United States, but RBC noted the hard data so far shows households are still spending despite the uncertainty. Desjardins also believes that once businesses get a bit more clarity on the trade front — talks so far appear productive, she said — they will also have the confidence to pick up investment again. She projects that will set up an economic recovery starting in the second half of the year, fuelled in part by a pair of additional quarter-point rate cuts from the Bank of Canada in the coming months. RBC, on the other hand, believes the economy is showing enough life that it doesn't need any support from additional rate cuts this year. That could change if cracks start to form in the economy, but RBC's assistant chief economist Nathan Janzen said he expects the central bank will remain on hold given 'resilience' in the economy. 'There is still room for the Bank of Canada to respond with more monetary policy support if the economy needs it,' he said. Both RBC and Deloitte point to recent steps taken by the federal government as girding Canada's economy from a steeper economic downturn. The House of Commons passed Bill C-5 at the end of last week, a sweeping set of legislation that aims to reduce interprovincial trade barriers and speed up major project development. Desjardins said the bill helps address long-standing reputational issues that Canadian industry is slow-moving and gets mired in red tape before getting shovels into the ground. While economists have long been banging the drum to draw attention to Canada's weak business investment levels and flagging productivity, she said the 'jolt' of the trade war has finally 'brought this to the top of this agenda.' 'This signals to business that Canada is now ready to move to a stronger playing field,' she said. RBC agreed that 'action on interprovincial trade barriers could pay long-run dividends helping to support investment and productivity growth.' Uncertainty about the U.S. market in the global trade upheaval also offers an opportunity for resource-rich Canada to support growing worldwide demand for critical minerals necessary to power artificial intelligence and defence products, RBC said. Monday Mornings The latest local business news and a lookahead to the coming week. Desjardins said it could be years before today's steps to knock down interprovincial trade barriers and build out national infrastructure pay dividends. It takes time to reorient supply chains, and manufacturing industries in some provinces will still take a hit during the adjustment. But she argued that the signal is nearly as important as the outcome when it comes to giving businesses the confidence they need to invest. Adopting this 'One Canadian Economy' framework, as Ottawa has dubbed it, 'is not a magic wand that changes the landscape,' Desjardins said. 'It is building more resilience in the economy and more room for growth.' This report by The Canadian Press was first published June 25, 2025.
Cision Canada
18-06-2025
- Business
- Cision Canada
NEW DATA: U.S. TARIFFS CONTINUE TO HAMMER CANADIAN MANUFACTURING, THREATENING JOBS AND INVESTMENT
OTTAWA, ON, June 18, 2025 /CNW/ - As Prime Minister Carney and President Trump commit to finalizing a new economic and security agreement within 30 days, Canadian Manufacturers & Exporters (CME) is warning that Canada's industrial base continues to suffer escalating damage. New survey data from CME reveals that three in four Canadian manufacturers are experiencing moderate to very severe harm from ongoing U.S. tariffs, undermining investment, employment, and broader economic stability. "The results are clear: tariffs are continuing to inflict serious damage on Canadian manufacturers and their workers—particularly in the steel, aluminum and auto sectors," said CME President & CEO Dennis Darby. "We urge the federal government to build on recent discussions between the President and the Prime Minister to secure a deal for Canada that removes these unjustified trade barriers." MANUFACTURERS TAKING ACTION TO MITIGATE TARIFF IMPACTS To cope with rising costs and market uncertainty caused by U.S. tariffs, manufacturers are actively adjusting their strategies—some of which are already contributing to reduced investment, job losses, and broader economic strain in Canada: 49 per cent are pursuing new export markets 44 per cent have cancelled or delayed investment plans 39 per cent have implemented hiring freezes or layoffs 16 per cent have shifted some production to the U.S. COUNTER-TARIFFS AND REMISSION PROCESS ADD FURTHER STRAIN Canada's retaliatory tariffs—many of which are temporarily paused—are also placing additional pressure on manufacturers: 66 per cent report increased input costs 46 per cent cite disruptions to supply chains and sourcing Just 3 per cent believe countermeasures have improved their competitiveness 22 per cent say they have had no noticeable impact Although the federal government has introduced a tariff remission process, awareness and uptake is low. Only 21 per cent of manufacturers are familiar with the process or have applied. Among those seeking relief: 56 per cent want help determining eligibility 44 per cent are seeking clear, step-by-step guidance on the application process 43 per cent are requesting training and documentation support CUSMA COMPLIANCE REMAINS A CHALLENGE FOR SOME While nearly 70 per cent of manufacturers report completing all required CUSMA documentation for eligible exports, challenges persists: 18 per cent produce CUSMA-compliant goods but have yet to complete the paperwork 35 per cent cite a lack of internal expertise as a barrier 33 per cent report receiving inconsistent guidance from government or trade advisors To support compliance, manufacturers are calling for: 42 per cent – clearer government guidelines, templates and digital tools 29 per cent – more direct access to government trade advisors 26 per cent – expanded training and workshop opportunities MANUFACTURERS CALL FOR STRONGER GOVERNMENT ACTION While recent relief measures are appreciated, manufacturers stress that more decisive action is urgently needed—especially if a deal with the U.S. is not reached in the coming weeks. Their top policy priorities include: 47 per cent – stronger diplomatic efforts to secure tariff exemptions or reductions 47 per cent – targeted tax relief to ease short-term cash flow pressures 34 per cent – temporary financial assistance to minimize layoffs and stabilize operations 30 per cent – a more accessible and efficient tariff remission process The survey, conducted in May and June, includes responses from more than 100 manufacturing firms across Canada. The findings underscore the vulnerability of Canada's manufacturing sector, which directly accounts for over 9 per cent of GDP, employs 1.8 million Canadians, and generates 60 per cent of the country's total goods exports. With more than 80 per cent of Canada's manufactured exports destined for the U.S.—representing over 40 per cent of total sector sales—the industry remains highly exposed to unwarranted U.S. trade actions. ABOUT CANADIAN MANUFACTURERS & EXPORTERS (CME) From the first industrial boom in Canada, CME has advocated for and represented member interests. 150 years strong, CME has earned an extensive and effective track record of working for thousands of leading companies nationwide. More than 85 per cent of CME's members are SMEs and collectively account for an estimated 82 per cent of total manufacturing production and 90 per cent of Canada's exports.
Hamilton Spectator
05-06-2025
- Automotive
- Hamilton Spectator
Five things to know about Canada's counter-tariffs on the U.S.
OTTAWA - After U.S. President Donald Trump boosted steel and aluminum tariffs to 50 per cent, some industry groups and the Official Opposition have called on the federal government to retaliate in kind. Here's a look at the counter-tariffs Canada has imposed so far. 1. What do the counter-tariffs cover? The Canadian government has imposed retaliatory tariffs on U.S. goods three times since Trump's trade war began, aimed at what it says are imports worth $95.4 billion worth. On March 4 — after the U.S. imposed 25 per cent tariffs on all Canadian goods, along with 10 per cent on energy products — then-prime minister Justin Trudeau announced the first raft of counter-tariffs on $30 billion worth of U.S. goods. Those 25 per cent tariffs target things like orange juice, motorcycles, clothing and shoes, coffee, cosmetics and alcohol. On March 12, the U.S. added a 25 per cent tariff on all steel and aluminum products, which was stacked on top of existing levies on Canadian goods. Canada's response a day later was 25 per cent reciprocal tariffs on another $29.8 billion of U.S. goods, including steel and aluminum, tools, computers and sport equipment. On April 9, in response to another round of U.S. tariffs — this time targeting the Canadian auto industry — the federal government imposed 25 per cent duties on 'non-CUSMA compliant vehicles' from the U.S. and 25 per cent tariffs on the content of CUSMA-compliant vehicles from the U.S. The government says this covers $35.6 billion in auto imports from the United States. 2. What are the exemptions? On April 15, in the midst of the federal election campaign, Prime Minister Mark Carney announced that the government was exempting some products from tariffs for six months to help Canadian businesses adapt. The tariff holiday covers specific categories: goods used in Canadian manufacturing, processing and food and beverage packaging, as well as imports used to support public health, health care, public safety and national security objectives. And when it comes to vehicle tariffs, the government said 'companies that produce autos in Canada have been granted remission to ensure the ongoing viability of their Canadian operations,' but that it is 'contingent on them maintaining production levels in Canada and on following through with planned investments.' 3. Does this mean all counter-tariffs have been dropped? On Wednesday, Opposition House leader Andrew Scheer said the government 'secretly dropped those tariffs to zero during the campaign.' This line has been repeated often by the Conservatives since the release of a report by Oxford Economics on May 13, which said Canada paused counter-tariffs for six months 'on nearly all U.S. goods imports.' The report said it estimated the exemptions would cover about 97 per cent of the tariffs. The government said that's not true. A spokesperson for Industry Minister Mélanie Joly said the exemptions apply to 30 per cent of the $60 billion worth of goods that are subject to tariffs — a figure that doesn't include the auto tariffs. William Pellerin, a partner in international trade at McMillan LLP, said the exemption is not nearly as broad as what's been reported. 'I think that report caused a lot of consternation within the trading community and the legal community. It is absolutely, certainly not zero impact on our clients,' he said, noting many of them are paying millions of dollars in duties already. 4. Where does all this leave Canadian businesses? Pellerin said there's a lot of confusion out there about what's covered by the exemptions. The Canada Border Services Agency has issued a customs notice explaining how to interpret the exemptions, 'but in many circumstances it's simply not obvious at all,' Pellerin said. As an example, he said he has clients who have been told by the CBSA that imported agricultural equipment is not exempt. 'We actually think that that's legally incorrect, that they've poorly interpreted the order-in-council,' he said. That's the kind of thing his firm is trying to sort out while it waits and hopes for a long-term resolution. 'Whatever actions need to be taken to get back to a tariff-free world (are) absolutely necessary,' he said. 5. How much tariff revenue has the government collected and where is it going? Conservative MPs have been asking this question in the House of Commons all week. On Tuesday, Conservative MP Dan Albas charged that 'Liberals promised $20 billion in elbows-up U.S. tariffs, but later dropped them with no regard to affected Canadian workers or fiscal impacts.' Prime Minister Carney responded to say that tariffs are still in effect and $1.7 billion has been collected so far. The federal government's latest fiscal monitor showed Canada collected an extra $617 million in import duties in March, as compared to the year before. Figures for April and May have not yet been published. During the election campaign, the Liberals and the Conservatives both estimated Canada would collect $20 billion in tariff revenue this fiscal year. In its election platform, the Liberal party pledged that 'every dollar raised from these tariffs will support Canadian workers and businesses affected by the trade war.' Officials at the Finance Department said in a statement that the money is going into the consolidated revenue fund and being used 'to support those hardest hit by this economic disruption.' The statement said that is happening through programs like employment insurance work-sharing, deferral of corporate income tax payments and GST/HST remittances, or by offering liquidity support through Export Development Canada, Farm Credit Canada, Business Development Canada and the Large Enterprise Tariff Loan Facility. — With files from Craig Lord This report by The Canadian Press was first published June 5, 2025.
