Published: Sat, March 10, 2018
Money | By Armando Alvarado

C$ hits 8-month low as Trump squeezes NAFTA partners

C$ hits 8-month low as Trump squeezes NAFTA partners

The chief executive of Canada's second largest auto parts manufacturer called the Trump administration's controversial steel and aluminum tariffs "ridiculous" and said the "punitive and frankly illegal" measures would be harmful to American jobs and industry.

Tariffs and a depreciating loonie would also boost the price of US imports into Canada, leading real merchandise imports to fall by a similar $8.8 billion or 1.8 per cent.

"We are extremely anxious about the consequences of a trade war and are urging the White House to not advance the plan", AshLee Strong, Ryan's spokeswoman, said in a statement.

"What I can confirm, and he's mentioned this, to the extent that we reach our objective in renegotiating NAFTA, which is the priority, that Canada and Mexico will be exempt from those tariffs", he told the House panel.

Mr. Trump's trade policy is supposed to be aimed at undoing USA trade deficits, so that explained why he aimed his rhetoric at China and Mexico, with whom the United States has large trade deficits.

Kuehl said the organization continues to stress that "trade is not a zero-sum game".

The poll of almost 50 foreign exchange strategists taken March 1-6 predicted that the loonie will climb to C$1.2700 to the greenback, or 78.74 USA cents, in one month, from around C$1.2875 on Tuesday.

But when Trump thinks about trade, he just sees downsides.

However, Trump has his eyes firmly fixed on the US midterm congressional elections this autumn, and appears to view his tariff moves as essential to firing up his base.

Lo and behold, citing the trade deficits that the USA has with Canada and Mexico, Trump indicated via Twitter this week that he would be willing to make exceptions on the new tariffs with the NAFTA partners, but only if a new trade agreement is signed that is satisfactory to US economic interests.

In an early-morning tweetstorm Monday, President Donald Trump defended his decision to impose new tariffs on steel and aluminum by pointing to trade problems involving two of the US's closest allies.

Trump Signs Off on US Metals Tariffs, Exempts Canada and Mexico
He also warned that a cascade of trade protectionism risked hurting the global economy, and ultimately the United States as well. Both the European Union and China have said they would retaliate against action by the United States, as have Mexico and Canada.

At the event in Richmond, MacNaughton said he found it "a bit strange" that tariffs could be justified that way, given the long history of cooperation between the USA and Canada on security.

Trump trade adviser Peter Navarro and Commerce Secretary Wilber Ross may now be looking for a "carve-out" for Canada, that may only invite others to seek the same.

But just a few hours later, representatives of the three countries appeared unfazed by Trump's tirade as they closed the latest round of negotiations to remake the 24-year-old trade agreement.

A federal government source with knowledge of the trade file said, however, that if the USA does impose the tariffs, Canada's reaction will be swift, and suggested a list of targeted actions is being considered.

The price of oil, one of Canada's major exports, rose along with the US stock market on forecasts for robust oil demand growth.

That did not satisfy Republican critics, and Canada had continued to threaten retaliation. White House officials anonymously floated the possibility of a 30-day exemption linked to NAFTA, and they said Trump would hold a signing ceremony to formally impose teh tariffs on Thursday afternoon.

"I've watched where the reporters have been writing 2 per cent of our steel comes from China".

But the details are being hotly debated within the White House.

Across the pond, a trade war really is brewing.

Gagnon said the proposed tariff is of great concern, especially for Kitimat's BC Works, which exports 50 per cent of its production to the U.S.

Apple could do more of that in the United States, but every place offers different skills. "We're going to see what he actually announces... but we're continuing to push on getting the right deal for Canada, getting the right deal for Canadians".

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