Despite keeping its borders open for goods shipments during the coronavirus pandemic, Canadian trade fell in March while its trade deficit widened to Can$1.4 billion (US$1 billion), according to data released Tuesday.
The figure, up from a Can$894 million deficit in February, beat analyst forecasts. Year over year, trade fell 10 percent.
But with a full month of physical distancing policies in place in April, trade values are expected to “decrease more severely” in that month, warned Statistics Canada.
Total exports fell 4.7 percent to Can$46.3 billion in March while imports declined 3.5 percent to Can$47.7 billion, the government agency said.
Automakers and several auto engine and parts suppliers in North America notably began to cease production or shifted production to medical masks and ventilators, with the introduction of physical distancing measures.
This had “a significant impact” on trade, according to Statistics Canada.
Energy imports and exports were also down in the month, reflecting weaker global demand for oil, with the collapse in oil prices likely to be felt “more severely in future months,” it said.
The double drop in car and oil sales resulted in “a sharp decline in trade” with the United States, while Canada’s trade surplus with its largest trading partner narrowed slightly from Can$4.0 billion in February to Can$3.9 billion in March.
The month also saw lower exports of aircraft, but higher exports of farm, fishing and intermediate food products, with the end of rail blockades by indigenous rights activists allowing a grain backlog to be cleared.
Britain begins post-Brexit trade talks with the United States on Tuesday, with 100 negotiators on each side joining via videoconference.
Many in Prime Minister Boris Johnson’s Conservative government hope for a free trade agreement with Washington as one of the biggest benefits of leaving the European Union.
Officials said the first round of talks would last two weeks and cover issues such as goods and services trade, digital trade, investment and how to support small businesses.
The US ambassador to Britain, Woody Johnson, said the deal could “jumpstart the economy after we conquer coronavirus” — a message repeated by British officials.
“The US is our largest trading partner and increasing transatlantic trade can help our economies bounce back from the economic challenge posed by coronavirus,” International Trade Secretary Liz Truss said.
Bilateral trade was worth £220.9 billion ($275 billion, 252.6 billion euros) in the last year, and a free trade deal could increase this by £15.3 billion on 2018 levels, in the long run, the British government says.
Truss and US Trade Representative Robert Lighthizer will kick off the talks before officials take over, with further rounds due at six-week intervals.
Britain voted in a referendum in June 2016 to leave the EU, and after years of politically wrangling finally quit on January 31 this year.
Its departure allowed Britain to start trade talks with other countries, including the US.
Kenya has decided to ban the slaughter of donkeys for use in Chinese medicine, a practice condemned by animal rights activists as cruel, unnecessary and devastating to donkey populations in Africa, a minister said on Thursday.
Agriculture Minister Peter Munya told AFP that the ban, imposed earlier this week, came after “people petitioned my office to ban the slaughtering of donkeys because theft of donkeys to sell had increased”.
A ministry statement said rampant theft of donkeys was hitting farmers who use them to transport agricultural produce and water, and causing “massive unemployment”.
Four abattoirs dealing in donkey meat have been given a month to stop the practice.
People for the Ethical Treatment of Animals (PETA) hailed Kenya’s decision to “cut ties with a cruel trade that sentences gentle donkeys to miserable deaths by the millions.”
“No one needs donkey skin except the animals who were born in it,” said PETA Senior Vice President of International Campaigns Jason Baker.
Donkey skins are exported to China to make a traditional medicine known as ejiao, which is believed to improve blood circulation, slow ageing, and boost libido and fertility.
It was once the preserve of emperors but is now highly sought after by a burgeoning middle-class.
A PETA investigation last year showed donkeys being cruelly beaten by workers, or dead after long truck journeys from neighbouring countries.
UK-based animal welfare organisation The Donkey Sanctuary told AFP at the time that there were tales of the animals being rounded up and machine-gunned or bludgeoned to death
China is increasingly looking to Africa to satisfy demand as its own donkey population has nearly halved in recent years.
However several African countries have now banned Chinese-funded abattoirs or implemented policies to stop the export of donkey skins to China.
Donkeys reproduce slowly and do not handle stress well, and activists have raised fears that populations could be wiped out in east Africa in a matter of years.
Asian markets fell Wednesday as investors took their foot off the pedal following weeks of gains, with focus on the signing later in the day of the China-US trade deal.
While the mood on trading floors was broadly upbeat as tensions between the economic superpowers eased, analysts warned there will not likely be much more progress on the next phase of talks ahead of the US presidential election in November.
The mini pact, which has de-escalated a two-year standoff that has jolted the global economy, saw the White House halve tariffs imposed on September 1 on $120 billion of Chinese goods and cancel another round set for December 15.
In return, Beijing pledged vast sums to buy US products including pork and soybeans.
Still, the next round of negotiations is expected to be the toughest, with key issues including China’s massive subsidies for state industry and forced technology transfer proving key sticking points.
Treasury Secretary Steven Mnuchin denied a report that it could include provisions to roll back more levies on China after the presidential vote, with progress on phase two the key to measures being removed.
But he did tell Fox Business network: “I think phase one is an enormous step in the right direction.”
Officials said full details would be made public after the signing ceremony in Washington.
“We should not expect further tariff relief until after the November presidential elections, suggesting that today’s agreement is probably as good as it gets for 2020,” said National Australia Bank’s Tapas Strickland.
But he added: “Importantly for China… the deal will allow it to re-focus on its domestic economy which should reduce fears of a slowing economy.”
However, Markets.com analyst Neil Wilson, warned that the year could see fresh volatility.
“It’s possible that instead we see Trump threaten China more, dangling the prospect of abandoning the deal and taking an even tougher stance going into the election,” he said in a note.
With few other catalysts to drive buying on Wednesday, regional markets tracked a weak lead from Wall Street.
Tokyo and Shanghai both ended down 0.5 percent, while Hong Kong was off 0.4 percent.
Seoul and Singapore each dropped 0.4 percent, while there were also deep losses in Mumbai, Taipei, Bangkok, Jakarta and Manila, though Sydney and Wellington rose.
Still, with most negative headlines in the rearview mirror, analysts were upbeat.
“Right now we are in a more constructive process,” Omar Aguilar, at Charles Schwab, told Bloomberg TV.
“While the uncertainty is still there, the fact that there’s a laid-out plan for phase one and phase two has already been priced by the market and there is a positive view.”
In early trade, London and Paris both rose 0.2 percent, while Frankfurt was flat.
Key figures at 0820 GMT
Tokyo – Nikkei 225: DOWN 0.5 percent at 23,916.58 (close)
Hong Kong – Hang Seng: DOWN 0.4 percent at 28,773.59 (close)
Shanghai – Composite: DOWN 0.5 percent at 3,090.04 (close)
London – FTSE 100: UP 0.2 percent at 7,633.51
Pound/dollar: UP at $1.3029 from $1.3019 at 2145 GMT
Euro/pound: DOWN at 85.44 pence from 85.46 pence
Euro/dollar: UP at $1.1135 from $1.1126
Dollar/yen: DOWN at 109.93 yen from 109.98
Brent Crude: DOWN 15 cents at $64.34 per barrel
West Texas Intermediate: DOWN 16 cents at $58.07 per barrel
New York – Dow: UP 0.1 percent at 28,939.67 (close).
The United States, Mexico and Canada will sign an “initial deal” Tuesday finalizing the USMCA trade agreement, Mexican President Andres Manuel Lopez Obrador said.
“There is an initial deal between the governments,” the leftist leader told his daily news conference, as negotiators from the three countries prepared to meet in Mexico City.
“Today it will be signed by… the three countries’ negotiators.”
Lopez Obrador was due to chair a meeting of top officials from the three countries at the presidential palace at 1800 GMT.
Initially signed in November 2018, the United States-Mexico-Canada Agreement is meant to replace the 25-year-old North American Free Trade Agreement (NAFTA), which President Donald Trump complains has been “a disaster” for the US.
But Mexico is the only country to ratify it so far.
In Washington, opposition Democrats — acutely aware of the need to win back blue-collar voters they lost to Trump in 2016 — have insisted on greater oversight of Mexican labor reforms promised under the new deal, including wage hikes and increased power for unions.
The outgoing president of the European Commission Jean-Claude Juncker said Friday he believes the US will not impose new tariffs on imported European cars in the coming days.
President Donald Trump’s administration has been threatening since last year to impose tariffs on auto imports to defend the US automaking sector, a symbol of American manufacturing.
After postponing such measures in May, Trump is due to decide by mid-November whether to impose the supplemental tariffs on cars built in EU countries — a step particularly feared by the big German automakers.
But in an interview with a German newspaper, Juncker said he was “fully informed” on the issue and that Trump “will not do it”.
“Trump will criticise a little, but there will not be tariffs on cars,” he told the Suddeutsche Zeitung published Friday.
If adopted, it would mark the latest escalation of the trade conflict between Brussels and Washington, coming only weeks after the US imposed new punitive taxes on European products worth $7.5 billion.
That increase came in mid-October, four days after the World Trade Organization (WTO) gave Washington a green light to take retaliatory trade measures against the EU over its subsidies to European aerospace giant Airbus.
The United States also imposed heightened tariffs last year on EU-made steel and aluminium products.
On November 3, US Secretary of Commerce Wilbur Ross suggested Washington may not need to impose new customs taxes on auto imports.
“We’ve had very good conversations with our European friends, with our Japanese friends, with our Korean friends,” Ross said.
China and the United States have agreed a plan to remove tariffs imposed on two-way goods in stages, the commerce ministry said Thursday, as negotiators try to hammer out a trade deal.
“In the past two weeks, the negotiation leaders of the two sides have held serious and constructive discussions on properly resolving their core concerns and agreed to roll back the additional tariffs in stages, as progress is made towards a (final) agreement,” ministry spokesman Gao Feng said at a press conference.
President Donald Trump again Monday said a trade deal is imminent with Beijing which will help American farmers hurt by retaliation in the grinding conflict between the economic powers.
“We’re looking probably to be ahead of schedule to sign very big portion of the China deal, and we will call it phase one,” Trump told reporters.
The deal will “take care of the farmers” as well as “some of the other things” like banking, he said in another of his impromptu briefings before departing on a trip to Chicago.
Washington and Beijing have exchanged blows for over a year, with tariffs now impacting hundreds of billions of dollars in two-way trade.
US farmers were the first to be targeted with steep duties on soybeans and pork and the Trump administration has rolled out millions of dollars in support programs to help farmers caught in the crossfire.
Now with the 2020 presidential election approaching, and Trump under pressure from the impeachment inquiry in Congress, US trade officials have focused on getting a partial deal in the books.
The US president confirmed that he expects to sign the pact with his Chinese counterpart Xi Jinping on the sidelines of the APEC summit in Santiago in mid-November.
The Chinese Commerce Ministry said Saturday both sides agreed to “properly address each other’s core concerns.”
China will lift a ban on US poultry imports while the United States will import Chinese-made cooked poultry and catfish products, it said in a statement.
US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke with China’s Vice Premier Liu He on Friday and said they were “close to finalizing some sections of the agreement,” although they have released few details.
Both sides have said discussions will go on continuously at the deputy level and the top trade officials will have another call “in the near future.”
The White House held off on a massive tariff increase planned for October 15 on $250 billion in Chinese goods but new 15 percent tariffs on another $150 billion in goods are still scheduled for December.
The United States imposed tariffs on a record $7.5-billion worth of European Union goods on Friday, despite threats of retaliation, with Airbus, French wine and Scottish whiskies among the high-profile targets.
The tariffs, which took effect just after midnight in Washington (0401 GMT), came after talks between European officials and US trade representatives failed to win a last-minute reprieve.
The WTO-endorsed onslaught from US President Donald Trump also comes as Washington is mired in a trade war with China and could risk destabilising the global economy further.
In the line of fire are civilian aircraft from Britain, France, Germany and Spain — the countries that formed Airbus — which will now cost 10 percent more when imported to the US.
But the tariffs also target consumer products such as French wine, which Trump had vowed to attack in recent months. Wine from France, Spain and Germany will now face 25 percent tariffs.
Speaking in Washington hours before the tariffs were due to come into effect, France’s Economy Minister Bruno Le Maire warned the move would have serious repercussions.
“Europe is ready to retaliate, in the framework of course of the WTO,” he told reporters shortly after meeting with US Treasury Secretary Steven Mnuchin on the sidelines of the International Monetary Fund annual meetings.
“These decisions would have very negative consequences both from an economic and a political point of view.”
Le Maire was due to meet US Trade Representative Robert Lighthizer later on Friday.
He also warned the US against starting another front in its trade conflicts and again called for a negotiated solution.
At a time when the global economy is slowing, “I think that our responsibility is to do our best to avoid that kind of conflict,” Le Maire said.
The Europeans have long advocated negotiation over conflict and they themselves will be able to impose tariffs next year to punish the United States for subsidising Boeing.
But EU officials had already offered in July to call a truce on subsidies for planemakers, in which both sides would admit fault and agree to curtail state aid — to no avail. The two sides have been involved in a row over the subsidies for 15 years.
The tariffs kick in just days after the United States was given the formal go-ahead by the World Trade Organization.
As recently as Wednesday, Trump singled out the Europeans for being unfair with the US on trade, but said his door was open to negotiate a settlement.
The Europeans fear above all that Trump will impose heavy duties on imports of European cars around mid-November.
This would be a serious blow for the German automotive sector in particular, even if giants such as Volkswagen or BMW also manufacture in the United States.
“Our products are very hard to bring in (to Europe)” when Europeans easily import their cars into the United States, Trump said.
The Airbus-Boeing row is just one of several issues stoking transatlantic tensions that quickly descended into acrimony when Trump took office in 2017.
Trump embraced a protectionist agenda, slapping import duties on steel and aluminium from the EU and other allies, while also threatening tariffs on cars.
Trade groups in Europe such as winemakers, German tool manufacturers and whisky producers in Scotland have kept a clamour of protest, demanding Washington reverse tack.
The US leader and European Commission President Jean-Claude Juncker agreed in July 2018 to a ceasefire in the conflict to hold trade talks that have so far led nowhere.
The epic legal battle between Airbus and Boeing at the World Trade Organization began in 2004 when Washington accused Britain, France, Germany and Spain of providing illegal subsidies and grants to support the production of a range of Airbus products.
A year later, the EU alleged that Boeing had received $19.1 billion worth of prohibited subsidies from 1989 to 2006 from various branches of the US government.
The two cases were then tangled up in a legal quagmire, with each side being given partial vindication after a long series of appeals and counter appeals.
US President Donald Trump put China on notice at the United Nations Tuesday, declaring that the time of trade “abuses” by Beijing was “over” and calling on the country to protect Hong Kong’s “democratic ways of life.”
“For years, these (trade) abuses were tolerated, ignored, or even encouraged,” he told the UN General Assembly, arguing that “globalism” had caused world leaders to ignore their own national interests.
“But as far as America is concerned, those days are over,” he said.
The US president added that his administration was “carefully monitoring” the way China handles the crisis in Hong Kong.
“The world fully expects that the Chinese government will honor its binding treaty… (and) protect Hong Kong’s freedom and legal system and democratic ways of life”