By AFP
September 18, 2025
Canadian Prime Minister Mark Carney (L) and Mexican President Claudia Sheinbaum at a Group of Seven (G7) summit in June - Copyright AFP ANDREW CABALLERO-REYNOLDS
Jean ARCE
Mexico’s president will host the leader of Canada for trade talks Thursday as they seek to navigate the tariff war launched by Donald Trump despite the existence of a three-way free-trade agreement.
Claudia Sheinbaum and Prime Minister Mark Carney of Canada are to meet in Mexico City as Trump pushes to renegotiate the USMCA North American trade pact in place since 2020. It replaced the NAFTA accord signed in the 1990s.
The US president considers the new three- way deal unfavorable to his country, and has lashed out at his neighbors to the north and south over illegal migration and drug trafficking.
Trump has so far spared Mexico much of the threatened punishment, but hit some Canadian goods with 35-percent duties.
Sheinbaum told reporters Thursday that Carney’s visit would seek to “strengthen the Mexico-Canada relationship which, in addition to the treaty we already have, is to strengthen trade and economic investments in certain sectors.”
The pair will discuss boosting trade via Canadian and Mexican ports instead of roads or trains crossing through the United States.
The leaders will also consider a program of special visas for Mexican workers, as well as cooperation in education, renewable energy, and innovation, Sheinbaum said.
Before the trip, Carney said the two countries maintain “a strong relationship, built on more than three decades of free trade.”
He added that “in the face of a shifting global landscape, we are focused on elevating our partnerships in trade, commerce, security, and energy.
“Together, we will build stronger supply chains, create new opportunities for workers, and deliver greater prosperity and certainty for both Canadians and Mexicans.”
A review of the USMCA is scheduled for next year.
US tariffs are badly hurting Canada’s crucial auto, steel and aluminum sectors, leading to job losses.
Canada retaliated with tariffs on billions of dollars of US imports but, in a gesture aimed at facilitating a deal, Carney has since exempted US goods that fall under USMCA.
Sheinbaum has so far managed to stave off a blanket 30-percent US import tariff, although Mexico’s automotive, steel and aluminum sectors — like those of other countries — have been hit with higher levies.
The United States has long been the main destination for exports from both Mexico and Canada.
Bilateral trade between Mexico and Canada last year totaled under $32 billion — more than 20 times less than the trade each has with the United States.
Canada central bank cuts key lending rate citing Trump tariffs
ByAFP
September 17, 2025
Ben Simon
Canada’s central bank cut its key lending rate on Wednesday, offering a boost to borrowers in an economy squeezed by US President Donald Trump’s trade war.
The Bank of Canada reduced the rate to 2.5 percent, after holding it at 2.75 percent since March as it weighed the impact of Trump’s fluctuating tariffs on Canadian businesses heavily dependent on exports to the United States.
But the bank said there was now clear evidence Trump’s protectionism was inflicting damage on key, targeted sectors — notably autos, steel and aluminum, which have all suffered job losses.
“Tariffs are weakening the Canadian economy. You can see that very clearly in the directly affected sectors,” central bank Governor Tiff Macklem told reporters after the announcement.
The bank noted Canada’s GDP declined roughly 1.5 percent in the second quarter of 2025.
In the first quarter, exporters benefitted from a rush of orders from the United States as businesses tried to stock up before Trump’s tariffs fully took hold, the bank said.
But Canadian exports fell by 27 percent in the second quarter as rush orders eased.
There “is less US demand for our exports because there’s tariffs,” Macklem said.
– New trade deal? –
Trump has so far maintained tariff exemptions on goods compliant with an existing North American free trade agreement, partly muting the damage to Canada’s economy.
Macklem stressed the tariff rate for most Canadian exports to the United States remains low, as the vast majority of products fall under the trade pact, known as the United States-Mexico-Canada Agreement (USMCA).
But that deal, agreed during Trump’s first term, is up for review in 2026.
The prospect that Trump may seek major revisions has created further risk for Canada.
“With some stability in US tariffs in recent weeks, near-term uncertainty may have come down a little, but the focus is shifting to the upcoming (USMCA) review,” Macklem said.
Canada was the first G7 country to begin cutting rates last year, following several hikes to tame pandemic-fueled inflation.
While Wednesday’s cut was largely expected by analysts, the bank warned it would proceed cautiously, given the risk that US protectionism could drive up inflation.
Macklem told reporters that businesses are facing new costs as they try to adjust “to a different relationship with (Canada’s) biggest trading partner.”
People are looking for new suppliers and new customers, he said, adding that the eventual consequences of those shifts remain uncertain, including on inflation.
Given the broad uncertainty about the path ahead, Macklem said the central bank would be more cautious than normal about issuing any future guidance, as it closely watches export figures over the coming weeks.
Desjardins economist Royce Mendes predicted an additional cut at the bank’s next meeting in October, but said it was clear the bank was worried about further tariff damage.
“The Bank of Canada still seems wary of assuming that all of the impacts of US trade policy are in the rearview mirror,” he said.
ByAFP
September 17, 2025
Ben Simon
Canada’s central bank cut its key lending rate on Wednesday, offering a boost to borrowers in an economy squeezed by US President Donald Trump’s trade war.
The Bank of Canada reduced the rate to 2.5 percent, after holding it at 2.75 percent since March as it weighed the impact of Trump’s fluctuating tariffs on Canadian businesses heavily dependent on exports to the United States.
But the bank said there was now clear evidence Trump’s protectionism was inflicting damage on key, targeted sectors — notably autos, steel and aluminum, which have all suffered job losses.
“Tariffs are weakening the Canadian economy. You can see that very clearly in the directly affected sectors,” central bank Governor Tiff Macklem told reporters after the announcement.
The bank noted Canada’s GDP declined roughly 1.5 percent in the second quarter of 2025.
In the first quarter, exporters benefitted from a rush of orders from the United States as businesses tried to stock up before Trump’s tariffs fully took hold, the bank said.
But Canadian exports fell by 27 percent in the second quarter as rush orders eased.
There “is less US demand for our exports because there’s tariffs,” Macklem said.
– New trade deal? –
Trump has so far maintained tariff exemptions on goods compliant with an existing North American free trade agreement, partly muting the damage to Canada’s economy.
Macklem stressed the tariff rate for most Canadian exports to the United States remains low, as the vast majority of products fall under the trade pact, known as the United States-Mexico-Canada Agreement (USMCA).
But that deal, agreed during Trump’s first term, is up for review in 2026.
The prospect that Trump may seek major revisions has created further risk for Canada.
“With some stability in US tariffs in recent weeks, near-term uncertainty may have come down a little, but the focus is shifting to the upcoming (USMCA) review,” Macklem said.
Canada was the first G7 country to begin cutting rates last year, following several hikes to tame pandemic-fueled inflation.
While Wednesday’s cut was largely expected by analysts, the bank warned it would proceed cautiously, given the risk that US protectionism could drive up inflation.
Macklem told reporters that businesses are facing new costs as they try to adjust “to a different relationship with (Canada’s) biggest trading partner.”
People are looking for new suppliers and new customers, he said, adding that the eventual consequences of those shifts remain uncertain, including on inflation.
Given the broad uncertainty about the path ahead, Macklem said the central bank would be more cautious than normal about issuing any future guidance, as it closely watches export figures over the coming weeks.
Desjardins economist Royce Mendes predicted an additional cut at the bank’s next meeting in October, but said it was clear the bank was worried about further tariff damage.
“The Bank of Canada still seems wary of assuming that all of the impacts of US trade policy are in the rearview mirror,” he said.
.jpg)
No comments:
Post a Comment