Atlantic Canada & Prairies To Be Hit Hard By China’s Tariff Retaliation
Atlantic provinces is “in the eye of the storm.”
Canada’s trade war with the world’s largest economy is a serious threat to its stability. In fact, it’s such an economic threat that almost no one is paying attention to another significant one—the trade war with the world’s second-largest economy, China. RBC Economics warns that China has finally responded to Canada’s import tariffs on Chinese EVs and metals. China’s recent announcement will hit agricultural exports, potentially compounding pressure from American tariffs. The bank doesn’t see all provinces impacted, but that’s not the good news we think it is. RBC warns the blow is concentrated, delivering a precision hit to specific industries with Atlantic Canada and the Prairies in the eye of the tariff storm.
Canada-China Trade War Went Into High Gear With EV & Steel Tariffs
Last fall Canada hit China with 100% tariffs on EVs and certain steel products. Using the excuse of “national security,” the country claimed an oversupply of those materials could force prices lower, threatening jobs. China has a history of dumping, but our analysis at the time showed Chinese steel was trading at a price similar to global markets such as Germany. American and Canadian steel products were trading significantly higher, with tariffs attempting to prevent any correction from the 2020-boost to prices.
China threatened to retaliate if the tariffs persisted, and 6-months later they have. “China retaliated with tariffs of its own on various Canadian agricultural exports in response to Ottawa’s tariffs last fall on Chinese electric vehicles and metals,” explains Salim Zanzana, an economist at RBC. …[Continue Reading]