US-Canada Trade Conflict Muddies Outlook for USMCA
Dow Jones
Aug 24
1021 ET - The breakdown in U.S.-Canada trade talks does not bode well for the future of the USMCA trade treaty, which exempts the bulk of U.S.-bound Canadian exports from tariffs, says Bradley Saunders, economist at Capital Economics. Canada PM Mark Carney said this weekend the prospect of an intensified U.S.-Canada trade conflict marked a setback about USMCA. The Trump administration declined in July to renew USMCA for another 16 years, and instead subject the deal to annual reviews for a decade. This increases the risk of U.S. withdrawal from the pact. Saunders says a renewed trade war will delay USMCA talks, "dealing yet more damage to business sentiment and creating fresh challenges for the Bank of Canada as it balances worsening growth and inflation prospects."
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