Why a U.S-China trade fight could be a ‘net negative’ for Canada

A trade fight between a United States and China could potentially yield advantages to a handful of industries in Canada though a altogether impact would be negative for a Canadian economy, some experts warn.

“Any Canadian businesses that are offered products that could be replaced for Chinese products that have a tariffs being practical could advantage from this,” pronounced Craig Alexander, comparison vice-president and arch economist of a Conference Board of Canada.

“But altogether it’s going to be a net negative.”

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China announced a $3-billion list of U.S. products for probable plea after U.S. President Donald Trump summarized $60 billion US of tariffs on Chinese goods.

Specifics about that sectors will be targeted sojourn sparse. A detailed list of products is approaching to be developed
in dual weeks.

But a Chinese supervision pronounced it was deliberation a tariff boost of 25 per cent on pig and aluminum scrap, mirroring Trump’s 25 per cent assign on steel. A second list of goods, including wine, apples, ethanol and immaculate steel pipe, would be charged 15 per cent, mirroring Trump’s tariff travel on aluminum.

Potential opening

That could yield a intensity opening in a Chinese markets for some Canadian exporting firms that could reinstate higher-priced American goods, utterly in agriculture.

“They go after American pig exports and Canadian pig exports to China might be approaching to collect adult some of a slack,” said Robert Wolfe, professor emeritus for Queen’s University’s School of Policy Studies.  “So positively a pig farmers mount to benefit.”

A trade fight between a U.S. and China could yield a intensity opening in a Chinese markets for some Canadian rural exporters, including pig producers. (Ryan Remiorz/Canadian Press)

“There may be some other commodity suppliers who competence advantage if U.S. producers who trade products identical to ours get close out of a Chinese marketplace or face aloft prices in a Chinese market,” pronounced Wolfe.

As well, if Chinese exports are kept out of a U.S. market, they will demeanour for choice markets, pronounced Lynette Ong, an associate highbrow of domestic scholarship during a University of Toronto’s Munk School of Global Affairs.

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“Canada is expected to be a champion in this respect,” she said. “We will see China heightening a efforts to negotiate shared giveaway trade deals with Canada and other countries.”

Meanwhile, a Canadian steel courtesy competence be means to benefit marketplace share in North America by taking advantage of a vast tariffs being practical on Chinese steel, Alexander said. 

Canadian retailers could also see an uptick in business, as a trade brawl would means a cost of consumer products to go adult in a U.S. and quell cross-border shopping, said Joy Nott, president of a Canadian Importers and Exporters Association.

Weaken tellurian economy

But from a incomparable macroeconomic perspective, Canada would expected humour overall, contend some experts.

“We’re unequivocally influenced by what’s function to tellurian demand,” Alexander said. “This is going to altogether break a tellurian economy.”

If a brawl was to escalate, some of China’s industries would be harm by a tariffs, while U.S. consumers and businesses will humour since of a aloft cost of alien products, Alexander said.

“This is going to be disastrous for a U.S. economy, this is going to be disastrous for a Chinese economy.”

A weakened Chinese economy would also reduce commodity prices, Alexander said. Canada, as an exporter of those tender materials, could take a poignant hit.

If a supply bondage that couple a U.S. and China and link Canada and a U.S. get disrupted, that won’t be good for a firms that competence be partial of those chains, Wolfe said. And if a intrusion leads to acceleration in a U.S., or vital industries start losing business, that too could have a disastrous impact on Canada.

Canada is so integrated in a U.S. supply chain, that whatever hurts a United States hurts Canada, pronounced Nott.

“They are a biggest customer,” she said. “Generally speaking, what’s not good for a states is not good for Canada. And there’s only no approach that this is good for a U.S.”

Not all Canadian industries, however, will indispensably collect adult a slack.  For example, there are suggestions that China, a largest importer of U.S. soybeans, could aim that industry.

China announced a $3-billion list of U.S. goods, including apples, that it pronounced competence be strike with aloft tariffs. (Mark Schiefelbein/Associated Press)

Ron Davidson, executive executive of Soy Canada, said the deception of aloft tariffs on Chinese imports of U.S. soybeans could outcome in increasing volume and cost of Canadian exports to China, though reduced volume and cost of Canadian exports in other markets. 

Impact on NAFTA

“The serious reserve of rail shipments in western Canada would significantly extent a intensity for Canadian farmers and exporters in Western Canada from holding advantage of new trade opportunities,” he said.

Canada is naturally assigned with a possess trade issues with a U.S., essentially a stability negotiations on NAFTA. And with Trump’s courtesy now focused on China, is it possible a boss competence surrender a bit on a agreement?

“Perhaps if his subdivision gives him credit for station adult to China, it give us some-more space to negotiate a understanding on NAFTA. Maybe,” pronounced Alexander.

“Reading a tea leaves in a stream sourroundings is unusually difficult.”

But Wolfe said NAFTA is on a possess lane and he doesn’t trust Trump will take his eye off a understanding only since of China.

“He’s utterly happy to have some-more than one intrusion going on during a time.”

Article source: http://www.cbc.ca/news/business/united-states-china-trade-war-canada-1.4590523?cmp=rss