Trump Says He Is Not Sure USMCA Is Still Necessary as He Hosts Carney
U.S. President Donald Trump has expressed doubts about the necessity of the trilateral United States-Mexico-Canada Agreement (USMCA) and expressed his desire to make his own cars and steel. During a working luncheon with Prime Minister Mark Carney, Trump told journalists that nothing he could say during their meeting would convince him to lift tariffs on Canada and insisted he no longer wants Canadian-built automobiles being sold in the United States. He also indicated he is not giving up on the idea of annexing Canada as the 51st state.
Mr. Carney interjected to flatly rule out political union with the United States, stating that the opportunity lies in the partnership and what they can build together. He also stated that Canadians’ view on annexation is not going to change. The first sit-down between the two may be the highest-stakes tête-à-tête ever between a Canadian prime minister and U.S. president.
Ahead of the sit-down, Trump reiterated his claim that the U.S. is “subsidizing Canada” by $200 billion annually “in addition to giving them FREE Military Protection.” He said the U.S. does not need anything Canada produces and would be asking Mr. Carney why this is. While the U.S. has a trade deficit in goods with Canada, it is not $200 billion and mostly exists because the U.S. buys so much Canadian oil and gas because it does not produce enough domestically to meet demand.
Mr. Carney described Trump as “a transformational president” and suggested the pair would find common ground on fighting fentanyl. He also conceded that Canada had more to do on increasing defense spending, a frequent complaint of Mr. Trump’s. The President also seemed to soften his demands that Canada join the U.S., saying “it takes two to tango” and that he would respect Canadians’ decision not to be annexed.
Source: Globe and Mail
Source: Globe and Mail
Source: CTV News
Source: Globe and Mail
Battle Lines Drawn as Steel Producers Push ‘Buy Canadian’ to Fight Tariffs and Dumping
The Canadian steel industry has been fighting over 20 countries since 2014 to keep foreign-produced, unfairly priced steel out of the country. The Canadian International Trade Tribunal (CITT) has vindicated domestic steel producers and levied duties on the accused countries’ rebar. However, rebar continues to pour into Canada, affecting everything from housing prices to jobs and national security. The industry’s trade group traces the root of the problem to a global overcapacity in steel production, most pronounced in China. As the steel industry pushes a “Buy Canadian” campaign, doing so often means paying more for the same products, which can be an economic deterrent all on its own. Chris Gardner, chief executive of the Independent Contractors and Business Association of British Columbia, says that it is cheaper to source rebar from foreign markets, such as Asia or the U.S., than it is from steel mills in Central Canada just because of the cost of shipping it.
The majority of the domestically produced rebar originates in steel plants in Ontario and Quebec. The cost of shipping heavy steel rods across the country by rail or truck can be significant, as much as $200 per metric ton, compared to $39 to $69 per ton to bring rebar in from Asia or the Middle East by maritime shipping. Contractors in the West say they sometimes can’t obtain domestically produced rebar, so homebuilders in Western Canada have turned to rebar imported from Asia, Washington, or elsewhere, which helps keep the cost of construction down.
China’s overcapacity has led to a surge in steel dumping, with many industry executives blaming the country for overbuilding its production capacity years ago. The OECD recently reviewed how excess capacity is disrupting international markets and leading to trade cases, such as anti-dumping actions at the CITT. The committee concluded that significant Chinese subsidization in 2024, including grants, tax incentives, differentiated electricity pricing, and below-market borrowing to steel companies in China and other countries, will worsen steel excess capacity problems and trigger further trade disruptions for Steel Committee members going forward.
Excess steel capacity is expected to increase to 721 million tons globally by 2027, up from an estimated 602 million tons in 2024, putting enormous pressure on the viability of even highly competitive steelmakers. Canada, which has accounted for around 1.5 percent of global steel exports in recent years, has already sought to block China from flooding its market.
Source: Financial Post
Businesses Are Rushing to Reroute Shipments to Canada in a Move That Might Lead To Cheaper Goods
Businesses are rerouting U.S.-bound shipments from China to Canada to avoid tariffs and seek a swift resolution to the escalating trade war. However, this approach risks flooding the Canadian market with discounted goods and raising competition for scarce warehouse storage. Flexport reported a 50% spike in consignments from China to Canada in just one week in mid-April. Customs brokers and other industry specialists are also seeing a surge in consumer packaged goods, chemical, and automotive supply companies rushing to hoard inventory in Canada. Even Amazon and Walmart’s third-party sellers have reportedly been hoarding goods in the country.
Inquiries are increasing daily, with Michael Kotendzhi, CEO of Burnaby, B.C.-based 18 Wheels Warehousing & Trucking Ltd., seeing a steady flow of businesses reaching out to ask about the company’s bonded storage services. Steve Bozicevic, CEO of A&A Customs Brokers, has fielded calls from five companies looking to explore the rerouting option in the past three days—three to Mexico and two to Canada.
Clayton Castelino, president of Orbit Brokers in Mississauga, has also noticed clients exploring this option but generally advises against it. He and his team don’t anticipate a resolution to trade tensions south of the border until negotiations around the United States-Mexico-Canada Agreement reopen next year, which means businesses may ultimately need to seek alternative markets for their stock. The cost to store goods in a bonded facility for that amount of time would typically outweigh the cost of the tariff.
While estimates vary, the stalling method could cost sellers $200 to $250 a day per container, or an additional $1,750 a week in storage costs alone for an indefinite period. In the meantime, Canadian operators struggle to meet the unprecedented demand for massive amounts of storage space across Canada, and there will be a limited quantity that can be stored that way just because of the amount of capacity for the bonded warehouse system in Canada.
Source: Globe and Mail
Holes Emerge in Trump’s Plan To Bring Back Manufacturing
United States President Donald Trump aims to bring manufacturing back to the U.S. and with it the good old days of American factory towns, but the country might not have enough workers or the appetite for a return to the assembly lines. With U.S. unemployment at 4.2 percent in March 2025, the U.S. labour market is too tight to bring back domestic manufacturing, and the jobs would be less attractive to a modern-day workforce, CIBC Capital Markets economists Andrew Grantham and Avery Shenfeld said. “There’s a tendency to romanticize the glory days of manufacturing employment from decades ago,” they said in a note on Tuesday. “But it’s worth remembering that meatpacking plants, or rows of sewing machine operators making T-shirts, are also part of the manufacturing sector, and while they are welcome sources of employment for some, today’s younger workers are more likely to see their ideal employer elsewhere.”
Trump began imposing tariffs on imports shortly after becoming president for the second time to help bring production back to the U.S. Part of the plan is already working in certain cases. Several companies, including Johnson & Johnson, Apple Inc., Honda Motor Co. Ltd., Hyundai Motor Co. and Nvidia Corp., have all announced plans to boost U.S. manufacturing. But there is still a long way to go. Grantham and Shenfeld estimate the U.S. would need an additional 3.3 million workers to achieve a balanced trade on goods in the manufacturing sector, while a trade balance in just autos, metals, and electronics would require 1.8 million workers. “Unlike where we were at the turn of the millennium, or even more so, during the immediate aftermath of the 2008 financial crisis recession, we don’t have an overhang of unemployed manufacturers waiting to take positions that become available,” they said. “In both the factory sector and the overall economy, there are very few unemployed Americans relative to the number of open positions.”
Bringing back manufacturing jobs on a large scale would also require American workers to take a pay cut. Average hourly wages in manufacturing fell behind the overall private sector 10 years ago and widened during the pandemic even as more factories automated the lowest-paying jobs, the economists said. For example, the U.S. has given up a lot of factory jobs to Germany since 1997, but the American household income gap had widened compared to Germany by 2019. “It’s not clear that shifting workers from where they are currently employed into the kind of manufacturing jobs that would be needed to substitute for imports would represent a gain,” Grantham and Shenfeld said. On top of the recruiting challenges, tight immigration policies and an aging population in the U.S. would make filling these jobs even harder, they said. “It would be a long road to either train a sufficient number of Americans or bring in immigrants with these skills, along with the entire nexus of facilities needed to replicate what’s now present in Asia,” they said.
Source: Financial Post
