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MoneyThreat of U.S. tariffs on Mexico roils markets, dims hopes for new NAFTA

11:55  01 june  2019
11:55  01 june  2019 Source:   cbc.ca

A chronology of Canada’s standoff with U.S. over steel, aluminum levies

A chronology of Canada’s standoff with U.S. over steel, aluminum levies OTTAWA - Here is a timeline of key events in Canada’s dispute with the United States over NAFTA, the U.S.-Mexico-Canada Agreement and American tariffs on steel and aluminum : June 28, 2016: Republican presidential candidate Donald Trump declares his antipathy for the North American Free Trade Agreement in a campaign speech in Pittsburgh, in the heart of a Rust Belt state that he would eventually win to secure the presidency. “NAFTA was the worst trade deal in history,” says Trump, pledging to renegotiate the pact “to get a better deal for our workers.

Threat of U . S . tariffs on Mexico roils markets , dims hopes for new NAFTA Stocks fell sharply and hopes for swift passage of a new NAFTA deal dimmed after

Lay ins fell sharply and hopes for swift passage of a new NAFTA deal dimmed after U . S . President Donald Trump asseverated new tariffs that will “Imposing tariffs on goods from Mexico is exactly the wicked move,” said Neil Bradley, executive vice-president of the U . S . Chamber of Business, which

Threat of U.S. tariffs on Mexico roils markets, dims hopes for new NAFTA© Provided by Canadian Broadcasting Corporation

Stocks fell sharply and hopes for swift passage of a new NAFTA deal dimmed after U.S. President Donald Trump announced new tariffs that will apply to all imports from Mexico, starting June 10.

In tweets overnight, Trump said he is slapping a five per cent tariff on all Mexican imports until it does more to block the surge of Central American migrants trying to cross the U.S. border.

Unless Mexico can stop the flow of migrants, which would necessitate either closing its own southern border or negotiating with each of the troubled states they come from, the president is promising the tariffs will rise five percentage points each month and could be 25 per cent by Oct. 1.

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Stocks fell sharply and hopes for swift passage of a new NAFTA deal dimmed after U . S . President Donald Trump announced new tariffs that will apply to all imports from Mexico , starting June 10. In tweets overnight, Trump said he is slapping a five per cent tariff on all Mexican imports until it does

Stocks fell sharply after U . S . President Donald Trump announced new tariffs that will apply to all imports from Mexico , starting June 10. In tweets

U.S. imports from Mexico totalled $346.5 billion US in 2018, up 10.3 per cent from 2017 and range from avocados to auto parts.

The tariff would apply every time a part or final product passes across the U.S.-Mexico border and is seen as very negative for trade and jobs, while raising prices for American consumers.

In a tweet Friday, Trump said that if he imposes tariffs on Mexico, companies will leave that country to avoid paying them and relocate to the U.S.

"In order not to pay tariffs, if they start rising, companies will leave Mexico, which has taken 30 per cent of our auto Industry, and come back home to the U.S.A.," Trump wrote.

But business was unhappy with the development, warning the tariffs would have devastating consequences on manufacturers and consumers.

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Threat of U . S . tariffs on Mexico roils markets , dims hopes for new NAFTA . There is also a sneaking suspicion that Trump' s tariff threat , which grabbed headlines across North America, intentionally came just as the U . S . president was once again facing damaging news coverage about

Just as the fog of uncertainty shrouding North America' s new trade deal was starting to lift, Canada found itself socked in again Friday after U . S . President Donald Trump abruptly threatened Mexico with fresh tariffs tied to Threat of U . S . tariffs on Mexico roils markets , dims hopes for new NAFTA .

"Imposing tariffs on goods from Mexico is exactly the wrong move," said Neil Bradley, executive vice-president of the U.S. Chamber of Commerce, which is exploring legal action in response to the tariffs. "These tariffs will be paid by American families and businesses without doing a thing to solve the very real problems at the border. Instead, Congress and the president need to work together to address the serious problems at the border."

Auto sector hit hard

Carmakers, which could be especially vulnerable to business disruptions from the tariffs, took big losses in early trading Friday. General Motors, which imports more vehicles into the U.S. than any other U.S. automaker, tumbled more than four per cent Friday. Ford was down three per cent.

Technology and financial sector stocks also slumped.

In New York, the Dow declined 354 points to 24,804 by the close and the broader S&P index fell 36 points to 2,751. This is the first losing month this year for U.S. stocks, with the Dow down 5.7 per cent on the month and S&P off 5.6 per cent.

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Agriculture trade between the United States and Mexico was worth about 0 million US a day last The tariff threat comes just as the administration has been pushing for passage of the new NAFTA Threat of U . S . tariffs on Mexico roils markets , dims hopes for new NAFTA . With Trump' s new

Tariff tensions. The sources said it was Canada' s position that the Americans did not recognize the depth of anger in Canada over the tariffs — especially since President Threat of U . S . tariffs on Mexico roils markets , dims hopes for new NAFTA . With Trump' s new tariff threats , new NAFTA

Toronto stocks followed the U.S. down, with the TSX closing down 63 points to 16,025, mainly on a hit to the oil sector. The TSX is off 2.3 per cent this month, after rising steadily since the beginning of the year.

Because Mexico is an oil exporter and its heavy oil is refined at Gulf Coast refineries, oil prices fell worldwide. There was fear that with the new NAFTA in jeopardy and the trade war with China ongoing, global demand would slow.

West Texas Intermediate, the benchmark North American contract, was down $3.30 US or 5.8 per cent to $53.30 US. Western Canada Select, a Canadian crude contract, fell $2.67 cents to $36.77 US a barrel, its lowest price since January.

Loonie, peso fall

The Mexican peso fell by about 2.6 per cent against the U.S. dollar and the loonie sank below 74 cents US.

Mexico's Banco Base warned the tariffs could knock 2.85 percentage points off Mexico's exports. About 80 per cent of its exports go to the United States.

Chris Krueger, of Cowen Washington Research Group, speculated the new trade turmoil would leave any new Canada-U.S.-Mexico Agreement (CUSMA) dead in the water.

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Threat of U . S . tariffs on Mexico roils markets , dims hopes for new NAFTA . With an election fast approaching, quick ratification of the new NAFTA is extremely important politically for the Liberals. And that makes Trudeau and Trump the most unlikely of allies, especially given Trump' s habit of using

A backdrop of new hostility is hurting chances for Washington and Ottawa to successfully overhaul Nafta , say people close Two Trade Rules That Are Complicating Nafta Talks. Negotiators from the U . S ., Canada and Mexico are scrambling to reach a Nafta deal by July, but two proposals involving

"Trump unveiled a one-two punch that we believe will make [CUSMA] extremely hard to pass in both Mexico and the U.S. Our base case yesterday was that [the deal] would be ratified into law by the end of the year — we do not see a path for that now," he wrote in a note to clients.

The second punch, after the tariffs, was the notification that the White House would push ahead to submit the new trade deal for approval, undermining delicate negotiations with House Democrats.

Mexico has already made its objections to the tariffs known and signalled it may retaliate.

Mexico reacts

Jesus Seade, the trade negotiator for Mexican President Andrés Manuel López Obrador, said Thursday in a news conference that if the tariffs come to pass, "we should respond in a forceful way." But he said right now that it is important to find out whether these tariffs are "really on the table."

He said if Trump is serious, the move is bad for "two countries that are trying to arrive at a marvellous free trade treaty, the best in history, according to President Trump."

Canada's Foreign Affairs Minister Chrystia Freeland expressed confidence that Mexico would go ahead with ratifying the treaty, which is before its parliament.

"The Mexican president has said today, speaking for Mexico, that Mexico intends to move ahead with its ratification process," she said.

Automaker shares plunge after Trump's surprise Mexico tariffs, GM shares fall 5%

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U . S . President Donald Trump has threatened to impose tariffs on all Mexican imports as of June 10. Flavio Volpe, president of the Automotive Parts

Trump announces new Mexican tariffs in response to migrants: North American stocks down after Trump plan to impose tariffs on Mexico North The decision showed the administration going to new lengths, and looking for new levers, to pressure Mexico to take action — even if those risk upending

López Obrador announced Friday he was sending his foreign minister to Washington, D.C., to negotiate with U.S. officials ahead of the June 10 deadline set by Trump.

He said he wants to avoid confrontation with the U.S., but that Mexico is doing all it can to curtail illegal immigration. He pointed out most of the migrants are not Mexican, but from Honduras and Guatemala.

"We have to help so that they don't enter the United States illegally, but we also have to do it respecting human rights," López Obrador said. "Nothing authoritarian. They're human beings."

In the meantime, investors are fleeing the risk, says Derek Holt of Scotiabank Economics.

"When trade negotiations and deals prove to be worthless because the U.S. signature has been debased, then the only fair assumption is to brace for soured trade and investment prospects across the global economy, including in the U.S." he said, describing the mood in the markets.

"In this scenario, China, America's NAFTA partners, Europe and Japan all balk at even attempting negotiation with this U.S. administration and we wind up in a protracted stalemate that severely damages confidence."

A competing theory among investors is that the fear is overblown and that Congress will rein Trump in before he does serious damage to trade and the markets, he said.

Read more

Tariff threat against Mexico confirms a deal's not a deal with Trump: Don Pittis.
Everyone knows politicians sometimes fail to keep their word. But when an entire country gives its word, businesses generally assume they can count on it. Not so in the era of U.S. President Donald Trump, as shown by his latest tariff threat against trade partner Mexico.

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