NewzAn economic report says the latest bevy of threatened U.S. tariffs could spell trouble for the renegotiation of the Canada-U.S.-Mexico trade agreement. Bradley Saunders, with Capital Economics, writes that the duties set to come into effect this week risk stalling CUSMA talks by “reigniting a tit-for-tat trade war, hurting business confidence and slowing growth.” Saunders, the firm’s North America economist, says even if a last-minute tariff deal is reached, Ottawa would likely give up much of its limited leverage in CUSMA talks down the line.
government announced a plan last month to hit Canada with a 50 per cent tariff on hundreds of categories of goods worth a total of roughly US$20 billion. The tariffs are slated to take effect on Wednesday and would be imposed using an obscure legal tool dating back to the Great Depression, Section 338 of the Tariff Act of 1930. Saunders says in the report that Canada’s near-term gross domestic product is likely to suffer as a result of the impending tariffs, should they come into effect, but a recession is unlikely.
This report by The Canadian Press was first published Aug.
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