CANADA ECONOMICS

US TARIFFS ON STEEL AND ALUMINIUM IMPORTS

THE WHITE HOUSE. May 31, 2018. ECONOMY AND JOBS. PROCLAMATIONS. Presidential Proclamation Adjusting Imports of Aluminum into the United States

On January 19, 2018, the Secretary of Commerce (Secretary) transmitted to me a report on his investigation into the effect of imports of aluminum articles on the national security of the United States under section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862).

In Proclamation 9704 of March 8, 2018 (Adjusting Imports of Aluminum Into the United States), I concurred in the Secretary’s finding that aluminum articles are being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States, and decided to adjust the imports of aluminum articles, as defined in clause 1 of Proclamation 9704, as amended (aluminum articles), by imposing a 10 percent ad valorem tariff on such articles imported from most countries, beginning March 23, 2018.  I further stated that any country with which we have a security relationship is welcome to discuss with the United States alternative ways to address the threatened impairment of the national security caused by imports from that country, and noted that, should the United States and any such country arrive at a satisfactory alternative means to address the threat to the national security such that I determine that imports from that country no longer threaten to impair the national security, I may remove or modify the restriction on aluminum articles imports from that country and, if necessary, adjust the tariff as it applies to other countries, as the national security interests of the United States require.

In Proclamation 9710 of March 22, 2018 (Adjusting Imports of Aluminum Into the United States), I noted the continuing discussions with the Argentine Republic (Argentina), the Commonwealth of Australia (Australia), the Federative Republic of Brazil (Brazil), Canada, Mexico, the Republic of Korea (South Korea), and the European Union (EU) on behalf of its member countries, on satisfactory alternative means to address the threatened impairment to the national security posed by imports of aluminum articles from those countries.  Recognizing that each of these countries and the EU has an important security relationship with the United States, I determined that the necessary and appropriate means to address the threat to national security posed by imports of aluminum articles from these countries was to continue the ongoing discussions and to exempt aluminum articles imports from these countries from the tariff proclaimed in Proclamation 9704, as amended, until May 1, 2018.

In Proclamation 9739 of April 30, 2018 (Adjusting Imports of Aluminum Into the United States), I noted that the United States had agreed in principle with Argentina, Australia, and Brazil on satisfactory alternative means to address the threatened impairment to our national security posed by aluminum articles imports from these countries and extended the temporary exemption of these countries from the tariff proclaimed in Proclamation 9704, as amended, in order to finalize the details.

The United States has agreed on a range of measures with Argentina and Australia, including measures to reduce excess aluminum production and excess aluminum capacity, measures that will contribute to increased capacity utilization in the United States, and measures to prevent the transshipment of aluminum articles and avoid import surges.  In my judgment, these measures will provide effective, long-term alternative means to address these countries’ contribution to the threatened impairment to our national security by restraining aluminum articles exports to the United States from each of them, limiting transshipment and surges, and discouraging excess aluminum capacity and excess aluminum production.  In light of these agreements, I have determined that aluminum articles imports from these countries will no longer threaten to impair the national security and thus have decided to exclude these countries from the tariff proclaimed in Proclamation 9704, as amended.  The United States will monitor the implementation and effectiveness of the measures agreed upon with these countries to address our national security needs, and I may revisit this determination, as appropriate.

In light of my determination to exclude, on a long‑term basis, these countries from the tariff proclaimed in Proclamation 9704, as amended, I have considered whether it is necessary and appropriate in light of our national security interests to make any corresponding adjustments to such tariff as it applies to other countries.  I have determined that, in light of the agreed-upon measures with these countries, and the fact that the tariff will now apply to imports of aluminum articles from additional countries, it is necessary and appropriate, at this time, to maintain the current tariff level as it applies to other countries.

7.  Section 232 of the Trade Expansion Act of 1962, as amended, authorizes the President to adjust the imports of an article and its derivatives that are being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security.

Section 604 of the Trade Act of 1974, as amended (19 U.S.C. 2483), authorizes the President to embody in the Harmonized Tariff Schedule of the United States (HTSUS) the substance of statutes affecting import treatment, and actions thereunder, including the removal, modification, continuance, or imposition of any rate of duty or other import restriction.

Now, Therefore, I, Donald J. Trump, President of the United States of America, by the authority vested in me by the Constitution and the laws of the United States of America, including section 232 of the Trade Expansion Act of 1962, as amended, section 301 of title 3, United States Code, and section 604 of the Trade Act of 1974, as amended, do hereby proclaim as follows:

(1)  Clause 2 of Proclamation 9704, as amended, is further amended by striking the last two sentences and inserting in lieu thereof the following two sentences:  “Except as otherwise provided in this proclamation, or in notices published pursuant to clause 3 of this proclamation, all aluminum articles imports specified in the Annex shall be subject to an additional 10 percent ad valorem rate of duty with respect to goods entered for consumption, or withdrawn from warehouse for consumption, as follows:  (a) on or after 12:01 a.m. eastern daylight time on March 23, 2018, from all countries except Argentina, Australia, Brazil, Canada, Mexico, South Korea, and the member countries of the European Union, (b) on or after 12:01 a.m. eastern daylight time on May 1, 2018, from all countries except Argentina, Australia, Brazil, Canada, Mexico, and the member countries of the European Union, and (c) on or after 12:01 a.m. eastern daylight time on June 1, 2018, from all countries except Argentina and Australia.  This rate of duty, which is in addition to any other duties, fees, exactions, and charges applicable to such imported aluminum articles, shall apply to imports of aluminum articles from each country as specified in the preceding sentence.”.

(2)  In order to implement a quota treatment on aluminum articles imports from Argentina, U.S. note 19 to subchapter III of chapter 99 of the HTSUS is amended as provided for in Part A of the Annex to this proclamation.  U.S. Customs and Border Protection (CBP) of the Department of Homeland Security shall implement this quota as soon as practicable, taking into account all aluminum articles imports from this country since January 1, 2018.

(3)  The “Article description” for heading 9903.85.01 of the HTSUS is amended by deleting “of Brazil, of Canada, of Mexico, or of the member countries of the European Union”.

(4)  For the purposes of administering the quantitative limitations applicable to subheadings 9903.85.05 through 9903.85.06 for Argentina, the annual aggregate limits set out in Part B of the Annex to this proclamation shall apply for the period starting with calendar year 2018 and for subsequent years, unless modified or terminated.  The quantitative limitations applicable to subheadings 9903.85.05 through 9903.85.06 for Argentina, which for calendar year 2018 shall take into account all aluminum articles imports from Argentina since January 1, 2018, shall be effective for aluminum articles entered for consumption, or withdrawn from warehouse for consumption, on or after June 1, 2018, and shall be implemented by CBP as soon as practicable, consistent with the superior text to subheadings 9903.85.05 through 9903.85.06.  The Secretary of Commerce shall monitor the implementation of the quantitative limitations applicable to subheadings 9903.85.05 through 9903.85.06 and shall, in consultation with the Secretary of Defense, the United States Trade Representative, and such other senior Executive Branch officials as the Secretary deems appropriate, inform the President of any circumstance that in the Secretary’s opinion might indicate that an adjustment of the quantitative limitations is necessary.

(5)  The Secretary of Commerce, in consultation with CBP and with other relevant executive departments and agencies, shall revise the HTSUS so that it conforms to the amendments and effective dates directed in this proclamation.  The Secretary shall publish any such modification to the HTSUS in the Federal Register.

(6)  Clause 5 of Proclamation 9710, as amended, is amended by striking the phrase “as amended by Proclamation 9710,” in the first and second sentences and inserting in lieu thereof the following phrase:  “as amended, or to the quantitative limitations established by proclamation,”.  Clause 5 of Proclamation 9710, as amended, is further amended by inserting the phrase “or quantitative limitations” after the words “ad valorem rates of duty” in the first and second sentences.

(7)  Clause 4 of Proclamation 9739 is amended by striking the phrase “as amended by clause 1 of this proclamation,” and inserting in lieu thereof the following phrase:  “as amended, or to the quantitative limitations established by proclamation,” in the first sentence.  Clause 4 of Proclamation 9739 is further amended by striking the words “by clause 3 of this proclamation” from the second sentence.

(8)  Any provision of previous proclamations and Executive Orders that is inconsistent with the actions taken in this proclamation is superseded to the extent of such inconsistency.

IN WITNESS WHEREOF, I have hereunto set my hand this

thirty-first day of May, in the year of our Lord two thousand eighteen, and of the Independence of the United States of America the two hundred and forty-second.

DONALD J. TRUMP

THE WHITE HOUSE. May 31, 2018. PROCLAMATIONS. ECONOMY AND JOBS. Presidential Proclamation Adjusting Imports of Steel into the United States

1.  On January 11, 2018, the Secretary of Commerce (Secretary) transmitted to me a report on his investigation into the effect of imports of steel mill articles on the national security of the United States under section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862).

2.  In Proclamation 9705 of March 8, 2018 (Adjusting Imports of Steel Into the United States), I concurred in the Secretary’s finding that steel mill articles are being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States, and decided to adjust the imports of steel mill articles, as defined in clause 1 of Proclamation 9705, as amended (steel articles), by imposing a 25 percent ad valorem tariff on such articles imported from most countries, beginning March 23, 2018.  I further stated that any country with which we have a security relationship is welcome to discuss with the United States alternative ways to address the threatened impairment of the national security caused by imports from that country, and noted that, should the United States and any such country arrive at a satisfactory alternative means to address the threat to the national security such that I determine that imports from that country no longer threaten to impair the national security, I may remove or modify the restriction on steel articles imports from that country and, if necessary, adjust the tariff as it applies to other countries, as the national security interests of the United States require.

3.  In Proclamation 9711 of March 22, 2018 (Adjusting Imports of Steel Into the United States), I noted the continuing discussions with the Argentine Republic (Argentina), the Commonwealth of Australia (Australia), the Federative Republic of Brazil (Brazil), Canada, Mexico, the Republic of Korea (South Korea), and the European Union (EU) on behalf of its member countries, on satisfactory alternative means to address the threatened impairment to the national security posed by imports of steel articles from those countries.  Recognizing that each of these countries and the EU has an important security relationship with the United States, I determined that the necessary and appropriate means to address the threat to national security posed by imports of steel articles from these countries was to continue the ongoing discussions and to exempt steel articles imports from these countries from the tariff proclaimed in Proclamation 9705, as amended, until May 1, 2018.

4.  In Proclamation 9740 of April 30, 2018 (Adjusting Imports of Steel Into the United States), I noted that the United States had agreed in principle with Argentina, Australia, and Brazil on satisfactory alternative means to address the threatened impairment to our national security posed by steel articles imports from these countries and extended the temporary exemption of these countries from the tariff proclaimed in Proclamation 9705, as amended, in order to finalize the details.

5.  The United States has agreed on a range of measures with these countries, including measures to reduce excess steel production and excess steel capacity, measures that will contribute to increased capacity utilization in the United States, and measures to prevent the transshipment of steel articles and avoid import surges.  In my judgment, these measures will provide effective, long-term alternative means to address these countries’ contribution to the threatened impairment to our national security by restraining steel articles exports to the United States from each of them, limiting transshipment and surges, and discouraging excess steel capacity and excess steel production.  In light of these agreements, I have determined that steel articles imports from these countries will no longer threaten to impair the national security and thus have decided to exclude these countries from the tariff proclaimed in Proclamation 9705, as amended.  The United States will monitor the implementation and effectiveness of the measures agreed upon with these countries to address our national security needs, and I may revisit this determination, as appropriate.

6.  In light of my determination to exclude, on a long‑term basis, these countries from the tariff proclaimed in Proclamation 9705, as amended, I have considered whether it is necessary and appropriate in light of our national security interests to make any corresponding adjustments to such tariff as it applies to other countries.  I have determined that, in light of the agreed-upon measures with these countries, and the fact that the tariff will now apply to imports of steel articles from additional countries, it is necessary and appropriate, at this time, to maintain the current tariff level as it applies to other countries.

7.  Section 232 of the Trade Expansion Act of 1962, as amended, authorizes the President to adjust the imports of an article and its derivatives that are being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security.

8.  Section 604 of the Trade Act of 1974, as amended (19 U.S.C. 2483), authorizes the President to embody in the Harmonized Tariff Schedule of the United States (HTSUS) the substance of statutes affecting import treatment, and actions thereunder, including the removal, modification, continuance, or imposition of any rate of duty or other import restriction.

Now, Therefore, I, Donald J. Trump, President of the United States of America, by the authority vested in me by the Constitution and the laws of the United States of America, including section 232 of the Trade Expansion Act of 1962, as amended, section 301 of title 3, United States Code, and section 604 of the Trade Act of 1974, as amended, do hereby proclaim as follows:

(1)  The superior text to subheadings 9903.80.05 through 9903.80.58 of the HTSUS is amended by replacing “South Korea” with “Argentina, of Brazil, or of South Korea”.

(2)  For the purposes of administering the quantitative limitations applicable to subheadings 9903.80.05 through 9903.80.58 for Argentina and Brazil, the annual aggregate limits for each country set out in the Annex to this proclamation shall apply for the period starting with calendar year 2018 and for subsequent years, unless modified or terminated.  The quantitative limitations applicable to subheadings 9903.80.05 through 9903.80.58 for these countries, which for calendar year 2018 shall take into account all steel articles imports from each respective country since January 1, 2018, shall be effective for steel articles entered for consumption, or withdrawn from warehouse for consumption, on or after June 1, 2018, and shall be implemented by U.S. Customs and Border Protection (CBP) of the Department of Homeland Security as soon as practicable, consistent with the superior text to subheadings 9903.80.05 through 9903.80.58.  The Secretary of Commerce shall monitor the implementation of the quantitative limitations applicable to subheadings 9903.80.05 through 9903.80.58 and shall, in consultation with the Secretary of Defense, the United States Trade Representative, and such other senior Executive Branch officials as the Secretary deems appropriate, inform the President of any circumstance that in the Secretary’s opinion might indicate that an adjustment of the quantitative limitations is necessary.

(3)  The text of subdivision (e) of U.S. note 16 to subchapter III of chapter 99 of the HTSUS is amended by striking the last sentence and inserting in lieu thereof the following sentence:  “Beginning on July 1, 2018, imports from any such country in an aggregate quantity under any such subheading during any of the periods January through March, April through June, July through September, or October through December in any year that is in excess of 500,000 kg and 30 percent of the total aggregate quantity provided for a calendar year for such country, as set forth on the Internet site of CBP, shall not be allowed.”.

(4)  The Secretary of Commerce, in consultation with CBP and with other relevant executive departments and agencies, shall revise the HTSUS so that it conforms to the amendments and effective dates directed in this proclamation.  The Secretary shall publish any such modification to the HTSUS in the Federal Register.

(5)  Clause 5 of Proclamation 9711, as amended, is amended by striking the phrase “as amended by Proclamation 9711,” in the first and second sentences and inserting in lieu thereof the following phrase:  “as amended, or to the quantitative limitations established by proclamation,”.  Clause 5 of Proclamation 9711, as amended, is further amended by inserting the phrase “or quantitative limitations” after the words “ad valorem rates of duty” in the first and second sentences.

(6)  Clause 5 of Proclamation 9740 is amended by striking the phrase “as amended by clause 1 of this proclamation,” and inserting in lieu thereof the following phrase:  “as amended, or to the quantitative limitations established by proclamation,” in the first sentence.  Clause 5 of Proclamation 9740 is further amended by striking the words “by clause 4 of this proclamation” from the second sentence.

(7)  Any provision of previous proclamations and Executive Orders that is inconsistent with the actions taken in this proclamation is superseded to the extent of such inconsistency.

IN WITNESS WHEREOF, I have hereunto set my hand this thirty-first day of May, in the year of our Lord two thousand eighteen, and of the Independence of the United States of America the two hundred and forty-second.

DONALD J. TRUMP

PM. Global Affairs Canada. Itinerary for Thursday, May 31, 2018 Ottawa, Ontario - May 30, 2018

Note: All times local

Ottawa, Ontario

1:30 p.m.   The Prime Minister and the Minister of Foreign Affairs, Chrystia Freeland, will hold a media availability.

National Press Theatre

Media appearances

8:35 a.m.    An interview with the Prime Minister will air on Radio-Canada Première Saguenay-Lac-St-Jean, Y’a des matins.

PM. May 31, 2018. Remarks by the Prime Minister of Canada on steel and aluminum tariffs imposed by the United States

Today in Ottawa, Prime Minister Justin Trudeau responded to the decision by the United States to impose tariffs on Canadian steel and aluminum.

Prime Minister Justin Trudeau shakes hands with a steel worker at a factory in Sault Ste. Marie, Ontario

Ottawa, Ontario - The Prime Minister, Justin Trudeau, today delivered the following remarks in response to the decision by the United States to impose tariffs on Canadian steel and aluminum:

Good afternoon everyone. Thank you for joining us.

Today we find ourselves the target of punitive tariffs on Canadian aluminum and steel, under pretext of a 232 national security provision.

Let me be clear: These tariffs are totally unacceptable.

For 150 years, Canada has been America’s most steadfast ally.

Canadians have served alongside Americans in two world wars and in Korea.

From the beaches of Normandy to the mountains of Afghanistan, we have fought and died together.

Canadian personnel are serving alongside Americans at this very moment. We are partners in NORAD, NATO, and around the world.

We came to America’s aid after 9/11 – as Americans have come to our aid in the past.

We are fighting together against Daesh in Northern Iraq.

The numbers are clear: The United States has a $2 billion US dollars surplus in steel trade with Canada – and Canada buys more American steel than any other country in the world, half of U.S. steel exports.

Canada is a secure supplier of aluminum and steel to the U.S. defence industry, putting aluminum in American planes and steel in American tanks.

That Canada could be considered a national security threat to the United States is inconceivable.

These tariffs will harm industry and workers on both sides of the Canada-U.S. border, disrupting linked supply chains that have made North American steel and aluminum more competitive around the world.

Beyond that, these tariffs are an affront to the long-standing security partnership between Canada and the United States, and in particular, to the thousands of Canadians who have fought and died alongside American comrades-in-arms.

The ties of commerce, friendship and, in many cases, family between Americans and Canadians are undiminished – indeed, they have never been stronger.

The Government of Canada is confident that shared values, geography and common interests will ultimately overcome protectionism.

As we have consistently said, we will always protect Canadian workers and Canadian interests.

Minister Freeland is here to outline retaliatory measures. This morning, I called the Opposition leaders to notify them of our response.

In closing, I want to be very clear about one thing: Americans remain our partners, friends, and allies. This is not about the American people. We have to believe that at some point their common sense will prevail.

But we see no sign of that in this action today by the US administration.

Prime Minister Justin Trudeau and Minister Chrystia Freeland hold a media availability in Ottawa. Justin Trudeau and Chrystia Freeland Respond to U.S. Tariffs on Steel and Aluminum

Prime Minister Justin Trudeau and Foreign Affairs Minister Chrystia Freeland speak with reporters in Ottawa about the Trump administration’s decision to impose tariffs on steel and aluminum imports from Canada, Mexico and the European Union. U.S. Commerce Secretary Wilbur Ross says the tariffs will take effect as of midnight tonight. Canada, Mexico and Europe were temporarily exempted from import duties of 25 per cent on steel and 10 per cent on aluminum pending the outcome of NAFTA negotiations.

Canada is proposing countermeasures, including tariffs on U.S. aluminium, steel, and a wide range of food, chemical, and wood products. The list includes:

• maple syrup and toffee
• pizza and quiche
• mayonnaise and whisky
• playing cards and lawnmowers
• dishwasher detergent and sleeping bags
• beer kegs and toilet paper

Canada is imposing dollar-for-dollar tariff “countermeasures” on up to $16.6 billion worth of U.S. imports in response to the American decision to impose tariffs on Canadian-made steel and aluminum, says Chrystia Freeland.

VIDEO: https://www.youtube.com/watch?v=aHxzG-VdO_A

The United States will formally impose tariffs on aluminium and steel imports from Canada (plus Mexico and the European Union) at midnight. Foreign Affairs Minister Chrystia Freeland outlines Canadian countermeasures: Says Canada will impose tariffs on U.S. steel, aluminum & other goods; says will take effect July 1st and "remain in place until the U.S. eliminates its trade-restrictive measures against Canada."

VIDEO: https://www.youtube.com/watch?v=3G1HsrRMeGY

The Canada-U.S. cross-border trade in steel and aluminium

• In 2017, Canada exported to the United States nearly $17 billion of the steel and aluminium products included in the proposed tariffs. (Statistics Canada)
• More than $14 billion of steel crossed the Canada-U.S. border in 2017. (Canadian Steel Producers Association)
• Canada exported $11.1 billion of aluminium and aluminium articles to the United States in 2017 — compared to $3.6 billion of imports from the U.S. (Statistics Canada)
• Close to 45% of Canada’s steel production is exported to the United States. Michigan, Ohio, Illinois, and New York are leading destinations.
• Over 50% of American steel exports go to Canada.
• Canada sent more than $5.6 billion of primary aluminium exports to the United States in 2016, with New York, Kentucky, Michigan, and Pennsylvania the top destinations. (Aluminium Association of Canada)
• Between 2000 and 2015, Canada’s share of world aluminium production fell from 10% to 5%. For the United States: 15% to 2.7%. And for China? 11% to 55%.
• U.S. aluminium production fell following the 2008 financial crisis and recession. But 2018 production is up 6.9% compared to this time last year. (The Aluminium Association)
• But in Canada, primary aluminium production is down 7.6% for the first two months of 2018, compared to January and February 2017.

Department of Finance Canada. May 30, 2018. Canada Bolsters Prevention of Transshipment and Diversion of Steel and Aluminum Products Through Country of Origin Marking Regime

Ottawa, Ontario – The Government of Canada is taking action to support Canadian steel and aluminum workers and industries by further bolstering efforts to prevent transshipment and diversion of unfairly priced foreign steel and aluminum into the North American market.

Today, Finance Minister Bill Morneau announced that Canada has aligned its country of origin marking regime for steel and aluminum products with that of our closest trading partner, the United States. These regulatory changes expand the scope of steel and aluminum products that need to be marked with their country of origin, and amend the criteria used to determine the country of origin for marked goods. Aligning with U.S. requirements will help support effective customs enforcement by ensuring more consistent and predictable treatment of these goods by Canadian and U.S. authorities. These improvements to the marking regime were made following a recent consultation through the Canada Gazette.

Better aligning the marking regime with that of the United States builds on new funding of more than $30 million over five years, starting immediately, and $6.8 million per year thereafter to hire 40 new officers to investigate trade-related complaints, including those related to steel and aluminum, and to improve the accuracy and timeliness of published steel import data. This is in addition to recent regulatory changes that allow the Canada Border Services Agency (CBSA) to identify and stop companies that try to avoid duties, and that give the CBSA greater flexibility in responding to situations where prices charged in the exporter's domestic market are distorted.

The Government of Canada also regularly consults with provincial-territorial representatives, as well as industry and union stakeholders, through recently established trade monitoring committees on steel and aluminum, to ensure imports do not hurt Canadian and North American jobs.

Canada continues to monitor the trade situation closely, and will take additional steps as needed to support our industries. This includes working closely with the steel industry to determine whether any broader trade measures, such as safeguards, may be appropriate to address the diversion of steel into the Canadian market.

Quote

"Canada is vigilant, determined and proactive about protecting our workers and industries from unfair trade practices. These new regulations continue to demonstrate Canada's commitment to fair and open trade that results in growth that works for everyone and strengthens Canada's global competitiveness."

- Bill Morneau, Minister of Finance

Quick Facts

• In 2017, the Canadian steel industry employed more than 23,000 Canadians and contributed $4.2 billion to Canada's gross domestic product (GDP).
• The Canadian aluminum industry employed 10,500 workers while contributing $4.7 billion to Canada's GDP.
• These industries are vital suppliers to the Canadian manufacturing, energy, automotive and construction industries.

FULL DOCUMENT: https://www.fin.gc.ca/n18/18-040-eng.asp

Canada further strengthens trade enforcement to protect steel and aluminum workers and industries

Ottawa, Ontario - April 26, 2018 - The Prime Minister, Justin Trudeau, today announced increased funding for the Canada Border Services Agency (CBSA) and Global Affairs Canada to further strengthen Canada’s trade enforcement.

This further bolsters Canada’s efforts to prevent transshipment and diversion of unfairly priced foreign steel and aluminum into the North American market. While Canada already has strong and effective enforcement, we are taking these additional steps to ensure our workers and industries are not harmed by unfair trade.

The new funding – more than $30 million over five years, starting immediately, and $6.8 million per year after that – will mean more than 40 new officers to investigate trade-related complaints, including those related to steel and aluminum.

This will also enable the gathering of more accurate data on imports to help us better monitor trade trends and better protect our industries and workers against unfair trade.

In addition to the new funding, the Government of Canada is:

• Further aligning Canada’s marking regime with that of our closest trading partner, the United States. Regulatory changes – subject to a 15-day consultation period through the Canada Gazette – will expand the scope of steel and aluminum products that need to be marked with their country of origin.
• Bringing into force the regulations announced by the Prime Minister on March 27, 2018. These include regulatory changes that allow the CBSA to identify and stop companies that try to avoid duties, and that give the CBSA greater flexibility to determine whether prices charged in the exporter’s domestic market are distorted. They also include measures to give unions standing to participate in trade remedy proceedings.

The Government of Canada is also consulting regularly with provincial-territorial representatives, as well as industry and union stakeholders, through recently established trade monitoring committees on steel and aluminum to ensure imports do not hurt Canadian and North American jobs.

Canada will continue to monitor the trade situation closely, and will take additional steps as needed to support our industries.

Quote

“Canadian workers and industries deserve a level playing field, and we will continue to protect them from unfair trade practices. Part of that includes making sure Canadian trade enforcement agencies have the resources they need to defend the competitiveness of our businesses and our important North American trading relationships. We will stand up for our workers and industries, and do what is needed to preserve the fair and open trading environment they depend on.”

—The Rt. Hon. Justin Trudeau, Prime Minister of Canada

Quick Facts

• Canada’s trade remedy system helps preserve a fair and open trading environment for our producers. It protects Canadian businesses from the impacts of foreign goods that have benefited from unfair subsidies or that are being sold in Canada at artificially low prices.
• There are currently 72 trade remedy measures in force on steel and aluminum imports, applied to 23 countries. Canada’s enforcement regime ensures that 100 per cent of steel shipments identified as potentially subject to trade remedy measures are verified by the CBSA in a timely and comprehensive manner.
• In 2017, the Canadian steel industry employed more than 23,000 Canadians and contributed $4.2 billion to Canada’s gross domestic product (GDP). The Canadian aluminum industry employed 10,500 workers while contributing $4.7 billion to Canada’s GDP. These industries are vital suppliers to the Canadian manufacturing, energy, automotive, and construction industries.

The Globe and Mail. 31 May 2018. The U.S. plans to hit Canada, Mexico and the EU with steel and aluminum tariffs as early as Thursday. Trump to impose steel tariffs on Canada. Ottawa has crafted a retaliation plan that would involve U.S. metals, including aluminum, sources say. The Trump administration is expected to impose tariffs on Canadian steel and aluminum imports.
ADRIAN MORROW, WASHINGTON
GREG KEENAN, TORONTO
LAWRENCE MARTIN, WASHINGTON

The Trump administration is planning to impose hefty tariffs on Canadian steel and aluminum imports as soon as Thursday – a move that threatens to spark a trade war and blow up already tense negotiations over the North American free-trade agreement.

Canada has crafted a retaliation plan that would involve U.S. steel and aluminum and other politically sensitive products, sources briefed on Ottawa’s strategy said.

U.S. President Donald Trump’s decision to hit Canada – as well as Mexico and the European Union – was reported by the Washington Post on Wednesday, and confirmed to The Globe and Mail by a senior Canadian official and a U.S. industry source.

The official cautioned that the President could change his mind before an official announcement.

The tariffs would impose levies on imports of 25 per cent on steel and 10 per cent on aluminum. Canada is the biggest supplier of both metals to the United States, with the value of shipments close to $20-billion annually.

The move would be the latest trade attack on Canada from its largest trading partner: Mr. Trump has accused the country of “taking advantage” of the United States under NAFTA and wants the pact overhauled. And last week, he ordered an investigation into auto imports to the United States that could lead to 25-per-cent tariffs on cars and trucks, which would disproportionately hit Canada; about 80 per cent of Canadian-made vehicles are for the U.S. market.

Two sources said Canada has prepared detailed options for retaliation, including an investigation into steel dumping from several countries, including the United States, with the possibility of imposing its own tariffs. Canada is also considering imposing levies on high-profile U.S.-made consumer goods and luxury items, with the goal of hurting the United States in a visible way without damaging Canada’s economy by restricting necessary imports.

“I would like to absolutely assure Canadians, particularly those who work in the steel and aluminium industries, that the government is absolutely prepared to and will defend Canadian industries and Canadian jobs,” Foreign Minister Chrystia Freeland said earlier on Wednesday.

“We will respond. And we will respond appropriately.”

Mr. Trump brought in tariffs on all steel and aluminum imports earlier this year, claiming they were necessary to ensure “national security” by building U.S. capacity to construct its own tanks and warships.

The President granted temporary exemptions to a handful of countries, giving them time to negotiate permanent exclusions in exchange for accepting restrictions on how much of the metals they could sell to the United States.

The tariff exemptions for Canada, Mexico and the EU expire on Friday.

The Trump administration used the threat of tariffs in NAFTA talks, saying Canada and Mexico would receive a permanent pass only as part of a renegotiated deal. NAFTA negotiations are deadlocked over tough protectionist demands from the United States.

Canada and Mexico have proposed NAFTA deals over the past month, said sources with knowledge of the closed-door talks – offering to agree to U.S. demands on content rules in the auto sector if the Trump administration drops its other proposals.

The United States rejected the offers.

On Tuesday, Ms. Freeland met with Mr. Trump’s trade chief, Robert Lighthizer, in Washington for two hours in an effort to get a permanent exemption on tariffs. She spoke with him again later by telephone, but left the U.S. capital on Wednesday morning empty-handed.

Negotiations on a further exemption for Canada had focused on agreeing to U.S. demands that NAFTA force auto makers to use more North American-made steel, the sources said. The Americans also pressed for a quota on the amount of steel and aluminium Canada could ship to the United States.

One source close to the NAFTA negotiations said Ms. Freeland informed Mr. Lighthizer that ending Canada’s exemption on steel and aluminum tariffs would be a clear signal that the Americans are not that interested in reaching a NAFTA deal.

Flavio Volpe, president of the Automotive Parts Manufacturers’ Association of Canada, echoed Ms. Freeland.

“It makes it really difficult to believe that deliberations are in good faith if you’re taking capricious actions like this that really hurt the other parties,” he said. “How do you sit at the centre of the global economy and behave this way?”

Prime Minister Justin Trudeau lobbied Mr. Trump directly by telephone last week, and contacted Vice-President Mike Pence on Tuesday.

The Globe and Mail. MAY 31, 2018. Canadian steel, aluminum hit with heavy U.S. tariffs
ADRIAN MORROW
GREG KEENAN, AUTO AND STEEL AND AIRLINE INDUSTRY REPORTER

WASHINGTON - The United States will impose tariffs on Canadian steel and aluminum, U.S. Commerce Secretary Wilbur Ross confirmed Thursday.

Tariffs of 25 per cent on steel imported into the United States and 10 per cent on imported aluminum will take effect as of midnight Thursday, Mr. Ross told reporters on a conference call.

He cited a lack of progress in the renegotiations of the North American free-trade agreement as a reason for President Donald Trump eliminating an exemption Canada was given when worldwide tariffs were announced earlier this year. “The talks are taking longer than we had hoped. There is no longer a very precise date as to when they will be concluded”

Canada has crafted a retaliation plan that would involve U.S. steel and aluminum and other politically sensitive products, sources briefed on Ottawa’s strategy said. Canada is the biggest supplier of both metals to the United States, with the value of shipments close to $20-billion annually.

On any potential Canadian response, Mr. Ross said: “We shall have to see what’s their reaction.”

The move is the latest trade attack on Canada from its largest trading partner: Mr. Trump has accused the country of “taking advantage” of the United States under NAFTA and wants the pact overhauled. And last week, he ordered an investigation into auto imports to the United States that could lead to 25-per-cent tariffs on cars and trucks, which would disproportionately hit Canada; about 80 per cent of Canadian-made vehicles are for the U.S. market.

Thursday’s announcement was quickly criticized in Canada.

Canada should respond immediately to the U.S. measures by levying tariffs on U.S. steel products imported into Canada, Joseph Galimberti, president of the Canadian Steel Producers Association, said.

The U.S. tariffs “place Canadian producers at an unfair competitive disadvantage in our largest export market, undermine our shared North American competitiveness in steel and do nothing to advance the national security of the United States of America,” Mr. Galimberti said in a statement.

“This is a destructively bad-faith move on the part of Trump and his White House, bringing Canada-U.S. relations to an historic low,” said veteran Canadian trade lawyer Larry Herman. “It almost certainly torpedoes NAFTA negotiations, even if Canada has tried to delink the issues. And beyond that, it deepens distrust and foreshadows very dark and difficult days for Canada-U.S. relations generally.”

Two sources said Canada has prepared detailed options for retaliation, including an investigation into steel dumping from several countries, including the United States, with the possibility of imposing its own tariffs. Canada is also considering imposing levies on high-profile U.S.-made consumer goods and luxury items, with the goal of hurting the United States in a visible way without damaging Canada’s economy by restricting necessary imports.

“I would like to absolutely assure Canadians, particularly those who work in the steel and aluminium industries, that the government is absolutely prepared to and will defend Canadian industries and Canadian jobs,” Foreign Minister Chrystia Freeland said earlier on Wednesday. “We will respond. And we will respond appropriately.”

Mr. Trump brought in tariffs on all steel and aluminum imports earlier this year, claiming they were necessary to ensure “national security” by building U.S. capacity to construct its own tanks and warships. The President granted temporary exemptions to a handful of countries, giving them time to negotiate permanent exclusions in exchange for accepting restrictions on how much of the metals they could sell to the United States.

The tariff exemptions for Canada, Mexico and the EU expire on Friday.

The Trump administration used the threat of tariffs in NAFTA talks, saying Canada and Mexico would receive a permanent pass only as part of a renegotiated deal. NAFTA negotiations are deadlocked over tough protectionist demands from the United States.

Canada and Mexico have proposed NAFTA deals over the past month, said sources with knowledge of the closed-door talks – offering to agree to U.S. demands on content rules in the auto sector if the Trump administration drops its other proposals. The United States rejected the offers.

On Tuesday, Ms. Freeland met with Mr. Trump’s trade chief, Robert Lighthizer, in Washington for two hours in an effort to get a permanent exemption on tariffs. She spoke with him again later by telephone, but left the U.S. capital on Wednesday morning empty-handed.

Negotiations on a further exemption for Canada had focused on agreeing to U.S. demands that NAFTA force auto makers to use more North American-made steel, the sources said. The Americans also pressed for a quota on the amount of steel and aluminium Canada could ship to the United States.

One source close to the NAFTA negotiations said Ms. Freeland informed Mr. Lighthizer that ending Canada’s exemption on steel and aluminum tariffs would be a clear signal that the Americans are not that interested in reaching a NAFTA deal.

Flavio Volpe, president of the Automotive Parts Manufacturers’ Association of Canada, echoed Ms. Freeland.

“It makes it really difficult to believe that deliberations are in good faith if you’re taking capricious actions like this that really hurt the other parties,” he said. “How do you sit at the centre of the global economy and behave this way?”

Prime Minister Justin Trudeau lobbied Mr. Trump directly by telephone last week, and contacted Vice-President Mike Pence on Tuesday.

The Globe and Mail. REUTERS. MAY 31, 2018. EU to impose measures against ‘unacceptable’ U.S. tariffs: Juncker

BRUSSELS - The European Union will impose counter measures after the United States decided to no longer exempt it from steel and aluminium tariffs, the head of the bloc’s executive Jean-Claude Juncker said on Thursday.

The United States said it was moving ahead with tariffs on aluminium and steel imports from Canada, Mexico and the EU, ending a two-month exemption and potentially setting the stage for a trade war with some of America’s top allies.

“This is a bad day for world trade,” Juncker said in a speech in Brussels. “So we will immediately introduce a settlement dispute with the WTO and will announce counter balancing measures in the coming hours.”

“It is totally unacceptable that a country is imposing unilateral measures when it comes to world trade.”

The Globe and Mail. REUTERS. MAY 31, 2018. Mexico hits back at U.S. tariffs with measures on farm, steel products

Mexico responded to U.S. steel and aluminum tariffs by imposing wide-ranging “equivalent” measures on farm and industrial products, the economy ministry said on Thursday, ratcheting up tensions during talks to renegotiate NAFTA.

The United States on Thursday morning said it was moving ahead with tariffs on aluminum and steel imports from Canada, Mexico and the European Union, ending a two-month exception and threatening to ignite a trade war.

The Mexican measures, which target pork legs, apples, grapes and cheeses as well as steel, could hit farm states that are a bastion of support for U.S. President Donald Trump, ahead of American midterm elections in November.

The Mexican measures will be in place until the U.S. government eliminates its tariffs, the ministry said.

“Mexico profoundly regrets and condemns the decision by the United States to impose these tariffs on imports of steel and aluminum from Mexico,” the ministry said.

“Mexico reiterates its openness to constructive dialog with the United States, its support for the international commerce system and its rejection of unilateral protectionist measures,” it said.

Mexico buys more steel and aluminum from the United States than it sells. It is the top buyer of U.S. aluminum and the second buyer of U.S. steel, the economy ministry said.

The countermeasures will hit U.S. hot and cold rolled steel, plated steel and tubes, the ministry said.

The United States, Canada and Mexico have been renegotiating the North American Free Trade Agreement, which governs trade between the three countries.

The Globe and Mail. REUTERS. MAY 31, 2018. U.S. steel, aluminum stocks gain as Trump moves ahead with tariffs

Shares of U.S. steel and aluminum producers gained on Thursday after the Trump administration moved ahead with tariffs on aluminum and steel imports from Canada, Mexico and the European Union, ending a two-month exemption.

On March 23, U.S. President Donald Trump imposed a 25-per-cent tariff on steel imports and a 10-per-cent tariff on aluminum, but had granted temporary exemptions to Canada, Mexico, Brazil, the EU, Australia and Argentina. The S&P 1500 steel index has risen 13.4 per cent since then, and gained another 1.6 per cent on Thursday morning.

Shares of U.S. Steel and AK Steel jumped about 6 per cent each, while Nucor and Steel Dynamics gained more than 2 per cent.

Century Aluminum jumped 7.1 per cent, and Alcoa gained 3.6 per cent.

Meanwhile, shares of big metal consumers including planemaker Boeing and heavy machinery maker Caterpillar declined about 1.5 per cent each.

Boeing was the biggest drag on the Dow Jones Industrial Average, which was down 0.95 per cent.

Tariffs have led to higher steel and aluminum prices in the United States, benefiting producers but potentially squeezing profit margins of large companies that use the metals.

Caterpillar’s strong performance in the March quarter was overshadowed by concerns that rising materials costs could hurt its margins.

For Boeing, a 10-per-cent aluminum tariff would increase the cost of manufacturing some planes by about 1.2 per cent if all of the aluminum is imported. But most of the aluminum Boeing uses is domestically produced.

Analysts pointed out that trade disagreements between the United States and Europe were far from over.

“We expect immediate retaliation from the EU, which, on a net basis, to us serves no positive economic purpose,” KeyBanc analyst Philip Gibbs said in a note.

He added: “We believe general consensus in the market was cooler heads would prevail and the EU and (North American Free Trade Agreement) trading partners would either be provided permanent exemptions and/or be subject to tariff-rate quotas.”

The European Commission, which coordinates trade policy for the 28 EU members, has said the bloc should be permanently exempted from the tariffs since it is an ally and not the cause of steel and aluminum over-capacity.

EU countries have given broad support to the Commission’s plan to set duties on 2.8 billion euros ($3.3 billion) of U.S. exports, including whiskey and motorbikes, if Washington ends the EU tariff exemption. EU exports potentially subject to U.S. duties are worth 6.4 billion euros.

REUTERS. MAY 31, 2018. TSX flat after U.S. tariffs on Canada steel, aluminum

Canada’s main stock index was little changed on Thursday after news of U.S. tariffs on aluminum and steel imports from Canada, Mexico and the European Union.

• At 10:27 a.m. ET (1427 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 3.20 points, or 0.03 percent, at 16,053.37.
• The energy sector dropped 0.2 percent as U.S. crude prices were down 1.5 percent a barrel. [O/R]
• The financials sector slipped 0.1 percent. The industrials sector rose 0.2 percent.
• The United States said it was moving ahead with tariffs on aluminum and steel imports from Canada, Mexico and the European Union, ending a two-month exemption and potentially setting the stage for a trade war with some of America’s top allies.
• On the TSX, 102 issues were higher, while 139 issues declined for a 1.36-to-1 ratio to the downside, with 36.55 million shares traded.
• The largest percentage gainer on the TSX was BRP Inc, which jumped 6.9 percent after first-quarter results.
• Superior Plus fell 5.3 percent, the most on the TSX, after news of the company buying NGL Energy Partner’s retail propane business. The second biggest decliner was Descartes Systems , down 5.1 percent after first-quarter results.
• The most heavily traded shares by volume were Nemaska Lithium, Bombardier , and Green Organic Dutchman Holdings.
• The TSX posted eight new 52-week highs and one new low.
• Across all Canadian issues there were 20 new 52-week highs and four new lows, with total volume of 62.62 million shares.
• Economic data showed that Canada’s economy grew at its slowest pace in nearly two years in the first quarter amid cooler exports and a weaker housing sector, though growth was still seen as strong enough for the central bank to raise interest rates again.

Reporting by Shreyashi Sanyal in Bengaluru; Editing by Sai Sachin Ravikumar

REUTERS. MAY 31, 2018. U.S. hits allies with tariffs as trade war fears rise
Jason Lange, Ingrid Melander

WASHINGTON/PARIS (Reuters) - The United States on Thursday said it will impose tariffs on aluminum and steel imports from Canada, Mexico and the European Union, ending months of uncertainty about potential exemptions and reigniting fears of a global trade war.

The move, announced by U.S. Commerce Secretary Wilbur Ross in a telephone briefing on Thursday, angered top U.S. allies and suggested a hardening of the Trump administration’s approach to trade negotiations.

It also sent a chill through financial markets, with the Dow Jones Industrial Average .DJI down around 0.5 percent. Shares of industrial heavyweights Boeing (BA.N) and Caterpillar (CAT.N) were each down about 1 percent, while shares of U.S. steel and aluminum companies rallied.

A 25 percent tariff on steel imports and 10 percent tariff on aluminum will be imposed on imports from the EU, Canada and Mexico starting at midnight (0400 GMT on Friday), Ross told reporters.

“We look forward to continued negotiations, both with Canada and Mexico on the one hand, and with the European Commission on the other hand, because there are other issues that we also need to get resolved,” he said.

U.S. President Donald Trump announced the tariffs in March as part of an effort to protect U.S. industry and workers from what he described as unfair international competition. Temporary exemptions were granted to a number of nations and permanent ones to several countries including Australia, Argentina and South Korea.

U.S. trading partners had demanded that the exemptions be extended or made permanent.

“Today, France and the EU disapproves, of course, these measures,” France’s junior trade minister Jean-Baptiste Lemoyne told reporters in Paris. “We are getting ready to put in place safeguards, rebalancing measures because we won’t let unjustifiable and unjustified measures go unanswered.”

Germany’s foreign minister Heiko Mass called the tariff decision unlawful.

The Trump administration also has threatened to impose tariffs on car imports, is engaged in negotiations with China to reduce America’s yawning trade deficit and has said it will punish Beijing for stealing its technology by imposing tariffs on $50 billion of imports from China.

And it is engaged in talks with Canada and Mexico to update the North American Free Trade Agreement (NAFTA).

The Mexican peso weakened by more than 1 percent against the dollar, briefly crossing the 20-to-the-dollar threshold to the weakest versus the greenback in 14 months.

‘SIGNIFICANT THREAT’

The tariffs, which have prompted several challenges at the WTO, are aimed at allowing the U.S. steel and aluminum industries to increase their capacity utilization rates above 80 percent for the first time in years.

They could also deal a heavy blow to non-U.S. producers.

“The decision announced today is a significant threat to the 22,000 Canadian households whose livelihoods are directly supported by employment in Canadian steel,” said Joseph Galimberti, president of the Canadian Steel Producers Association.

“We would like Canada’s response to this tariff to be immediate and significant,” Galimberti said, adding that the response should “certainly include steel being imported from the United States.”

Ross himself heads to Beijing on Friday where he will attempt to get firm deals to export more U.S. goods in a bid to cut America’s $375 billion trade deficit with China.

After months in which it appeared the Trump administration had been backing away from tariffs amid infighting between the president’s top economic advisers, Washington has over the past week ramped up its threats on trade.

German magazine Wirtschaftswoche reported on Thursday that Trump had told French President Emmanuel Macron he wanted to stick to his trade policy long enough that Mercedes-Benz cars were no longer cruising through New York. Shares of BMW (BMWG.DE), Daimler (DAIGn.DE) and Volkswagen (VOWG_p.DE) fell.

The U.S. administration launched a national security investigation last week into car and truck imports, using the same 1962 law that he has applied to curb incoming steel and aluminum.

France’s Finance Minister Bruno Le Maire had met with Ross on Thursday in a bid to end the stand-off over steel and aluminum.

“It’s entirely up to U.S authorities whether they want to enter into a trade conflict with their biggest partner, Europe,” Le Maire told reporters after the meeting.

Europe did not want a trade war, he said, but Washington had to back down from “unjustified, unjustifiable and dangerous tariffs”. The EU would respond with “all necessary measures” if the United States imposed them.

The European Commission, which coordinates trade policy for the 28 EU members, has said the bloc should be permanently exempted from the tariffs since it is an ally and not the cause of steel and aluminum overcapacity.

Boeing Co
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BA.NCAT.NBMWG.DEDAIGn.DEVOWG_p.DE

The EU has threatened to retaliate with tariffs on Harley Davidson motorcycles and bourbon, measures aimed at the political bases of Republican legislators who they wanted to stand up to Trump.

German Chancellor Angela Merkel said the EU would give a “smart, determined and jointly agreed” response to the new tariffs that she said would break WTO rules.

EU countries have given broad support to the Commission’s plan to set duties on 2.8 billion euros ($3.4 billion) of U.S. exports, including whiskey and motorbikes, if Washington ends the EU tariff exemption. EU exports potentially subject to U.S. duties are worth 6.4 billion euros ($7.5 billion).

Reporting by Eric Walsh and David Shepardson in Washington, Ingrid Melander in Paris, Madeline Chambers in Berlin, Philip Blenkinsop in Brussels and Allison Martell in Toronto; Writing by Paul Simao; Editing by Robin Pomeroy and Susan Thomas

REUTERS. MAY 31, 2018. U.S. Commerce Department to announce section 232 tariff changes

WASHINGTON (Reuters) - U.S. Commerce Secretary Wilbur Ross will hold a news briefing at 9 a.m. (1300 GMT) to announce “Section 232” national security-related tariff modifications, the U.S. Commerce Department said in a statement on Thursday.

The announcement comes after two sources said Washington will announce plans to impose tariffs on EU steel and aluminum imports as early as Thursday. A magazine separately reported that President Donald Trump wanted to push German cars out of the United States.

Reporting by Susan Heavey and Tim Ahmann; Editing by Chizu Nomiyama

US - CHINA

REUTERS. MAY 31, 2018. As Trump talks of trade losses, China is a win for U.S. East Coast ports
Howard Schneider

CHARLESTON, S.C. (Reuters) - For America’s fastest growing East Coast ports, trade with China equals billions of dollars of investment and thousands of well-paid jobs in the heart of Trump country and not, as the president portrays it, the death knell for America’s middle class.

At Atlantic ports in the southern United States, harbor channels are being deepened to handle bigger ships moving through a widened Panama Canal; cranes are being heightened to unpack the larger stacks of containers; new ship berths and expanded rail hubs are opening the door wider for the imported goods demanded by American consumers and businesses.

Exports are on the rise too, and could be boosted if President Donald Trump strikes deals to export tens of billions of dollars in commodities and energy to China in an effort to cut America’s $375 billion trade deficit with the world’s second largest economy.

“China is where the growth is,” said South Carolina Ports Authority chief executive Jim Newsome. “I don’t think the world can function without free trade ... The global supply chain is based on trade and I don’t think you can walk that back.”

Interviews with officials at key southeastern ports as well as federal employment data illustrate a piece of the U.S. trade puzzle often lost in the back and forth among national policymakers amid talk of tariffs and import restrictions.

Concern over a trade war flared anew this week as Washington said it still held the threat of imposing tariffs on $50 billion of imports from China unless Beijing addressed theft of American intellectual property, and China responded that it was ready to fight back.

One reason for China’s success in winning market share in the United States has been investment by American port operators to ensure that goods get to U.S. stores with relative speed and without losing their cost advantage.

Charleston, for example, touts a 29-day window for getting goods from Shanghai to Atlanta. Research published last year by the Federal Reserve Bank of Minneapolis found that for many goods the journey from China to the United States adds as little as 3 percent to the wholesale cost.

Along with other south Atlantic ports like Savannah, Georgia, and Jacksonville, Florida, officials in Charleston spent years planning for that future and along the way created thousands of the sort of blue-collar middle-wage jobs that Trump’s election campaign pledged to expand.

“It is an issue that has been glossed over - the importance of these hubs...Absolutely the investments have been critical to the trade with China,” said Michigan State University economist Oren Ziv, who is in the initial stages of research on how port investments affect local economies.

A SURGE OF NEW JOBS

China’s rise as a global manufacturing center, as Trump often notes, displaced many manufacturing jobs in the United States, particularly producing lower-value goods like furniture.

One influential and widely cited study by economists David Autor, David Dorn and Gordon Hanson estimated that the “China shock” caused the loss of 2.4 million manufacturing jobs in the United States between 1999 and 2011. Other studies have disputed this, saying the numbers were much lower, and that trends like automation by successful manufacturers played an outsized role.

But whatever the impact, the flood of imports has required more labor to move those goods around the country.

Nationally, jobs in transportation and “material moving” increased by 1.2 million between 2012 and 2017, according to federal data. That included more than 190,000 additional truck drivers with a median wage of $20 an hour, roughly 13 percent above the national median.

That set of occupations accounted for about 10 percent of the country’s overall increase in jobs during the period, behind only generally lower paying positions in food service and personal care.

The port in Savannah, the country’s fourth busiest container dock, now pushes 11,000 container loads of goods a day through its gates - 7 million microwave ovens worth of cargo space, about triple what was handled as of 2003.

The groundwork was laid when officials offered incentives for companies like Home Depot (HD.N) and others to build distribution centers on land owned by the port authority.

That has now burgeoned into 56 million square feet (5.2 million square meters) of warehouse space around the port, filled as fast as it can be built.

The vacancy rate in early 2018 was 0.52 percent according to Colliers International data supplied by Savannah Port officials.

A new rail hub designed to accommodate longer trains, along with $2 billion in dredging and other investments planned for the next decade will allow the port to compete for shipments of goods intended for destinations as far away as Chicago, said Georgia Ports Authority chief operating officer Ed McCarthy.

FROM PUERTO RICO TO CHINA FOCUS

Jacksonville is also deepening its channel, having in recent years switched its business model from north-south trade with Puerto Rico as the anchor destination, to a focus on China.

In Charleston, container traffic has been growing on average 8 percent a year since the end of the 2007-2009 recession as trade flows reoriented from Europe to Asia.

A $560-million dredging project, split between the state and federal governments, will deepen the harbor from 45 to 52 feet (13.7 to 15.8 meters) and allow ships carrying up to 18,000 20-foot (6-meter) containers to unload; the current largest is 14,000 containers.

A new $1.5 billion terminal currently under construction will add the ability to handle an additional 700,000 containers a year when it opens in 2021, with further expansion planned.

To be sure, the benefits move in both directions.

Charleston, for example, ships about $2 billion worth of vehicles a year to China, aiding the rise of BMW’s (BMWG.DE) plant in Spartanburg, South Carolina, as a source of high-end vehicles for the Chinese market. The Spartanburg plant is the single largest exporter of vehicles in the United States.

Likewise, if the Trump administration does manage to boost exports to China of agricultural goods and natural gas, the bigger ships and bigger harbors will have more outbound cargo.

The three ports are not major grain shippers like New Orleans or the Pacific Northwest, but exports of oil seeds, meat and wood pulp have been growing. They now account for about a quarter of U.S. wood pulp exports to China, and Charleston’s exports of meat grew tenfold to $107 million from 2003 to 2017.

But even if the boost in exports to China never happens, the dredging and expansion will continue, despite the trade debate raging in Washington.

Home Depot Inc
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“Why don’t we think this is an issue? We continue to grow,” said McCarthy of the Georgia Ports Authority.

“We have a terminal (Savannah) that can handle 5.5 million (containers). The design over the next 10 years is to handle 8 million and we are going to stay true to that.”

To view a graphic on Ports expansion capturing more Chinese trade, click: tmsnrt.rs/2L82eJA

Reporting by Howard Schneider; Editing by David Chance, Edward Tobin and Frances Kerry

REUTERS. MAY 30, 2018. China says reserves right to retaliate to U.S. actions against its investments

BEIJING (Reuters) - The United States’ measures against China’s investments are against World Trade Organization rules, and China reserves the right to take countermeasures, the commerce ministry said on Thursday.

China is not willing to see an escalation in Sino-U.S. trade frictions, and believes the two countries have a huge potential for cooperation, Ministry of Commerce spokesman Gao Feng told reporters at a regular news briefing.

After trade tensions between the two countries appeared to cool following talks in Washington earlier in the month, the U.S. on Tuesday said it still holds a threat of imposing tariffs and will press ahead with restrictions on investment by Chinese companies in the United States.

Reporting by Yawen Chen and Seyoung Lee; Editing by Kim Coghill

G7

The Globe and Mail. 31 May 2018. Canada insists G7 talks going well as questions mount over Trump’s priorities
BILL CURRY, WHISTLER, B.C.
MICHELLE ZILIO, OTTAWA

Top Group of Seven officials are gathering in Whistler this week amid growing concern that Canada is struggling to negotiate a final agreement that all seven countries can support.

Prime Minister Justin Trudeau is pushing for an agenda that largely reflects the themes of his domestic policy, including the promotion of women in the work force and tackling income inequality.

But U.S. President Donald Trump is currently focused on other issues, including China’s trade policies and his on-again, off-again June 12 meeting with North Korean leader Kim Jongun.

The Trudeau government is dismissing concerns that Mr. Trump’s protectionist “America First” agenda has disrupted planning ahead of next week’s G7 leaders’ summit in Charlevoix, Que., which will also be Mr. Trump’s first visit to Canada as President.

A Politico article published Wednesday quoted G7 sources saying talks have been “disconnected and unfocused” and that Canada has “no idea” how to handle the situation.

A senior Canadian government official, who was not authorized to speak on the record, rejected any concerns that Mr. Trump has derailed the G7 agenda.

The official said Canada is still committed to focusing on its predetermined themes at the Charlevoix summit, including women’s empowerment, climate change, peace and security, economic growth and jobs for the future.

Another senior Canadian government official said the concerns raised in the Politico article are likely coming from Europe, which is frustrated by Mr. Trump’s protectionist trade policies.

The official said the idea that Canada is at its wits’ end is spurious, as the G7 planning, including joint statements and a final communiqué, is on track.

In a statement Wednesday, PMO spokeswoman Chantal Gagnon said that despite some of their differences, G7 countries are all facing the same core problem, which is to make the economy work for everyone rather than just the wealthy.

“The policy prescriptions may be different in each country, but that challenge is at the core of what we are each facing internally and what we are facing as a world,” Ms. Gagnon said.

Another challenge in crafting a consensus is Italy’s continuing political turmoil.

Elections in March failed to produce a governing coalition and an effort this week to form a short-term caretaker government also failed.

That prompted further market concern as investors question the country’s direction.

Meetings in Whistler this week include finance ministers, development ministers and central bankers of the G7.

Canadian Finance Minister Bill Morneau’s three day visit to B.C. comes at the end of a week in which he announced Ottawa is buying the Trans Mountain pipeline from Kinder Morgan at a cost of $4.5-billion in an effort to proceed with doubling the line’s capacity over the objections of the B.C. government.

Meanwhile Friday, June 1, is the deadline set by the United States for the imposition of new steel and aluminium tariffs on Canada and Mexico.

The tariff threat has been used as a bargaining tool by the American administration in a bid to reach a deal on renegotiating the North American free-trade agreement.

An earlier tariff deadline of May 1 was extended. U.S. Treasury officials told reporters in a briefing this week that while Treasury Secretary Steven Mnuchin is not the U.S. lead on the NAFTA file, he expects to discuss U.S. trade issues with his G7 colleagues in Whistler.

The Whistler summit includes public panel discussions Friday featuring Bank of England Governor Mark Carney, International Monetary Fund director Christine Lagarde and former Canadian prime minister Paul Martin.

International Development Minister Marie-Claude Bibeau said she will ask her G7 counterparts and finance ministers to consider partnerships with the private sector and pension funds in an attempt to diversify development aid financing.

“We want to talk about how we can be innovative in our financing mechanisms,” Ms. Bibeau said in an interview with The Globe and Mail.

“We know that pension funds are looking at long-term return so they are more patient and we definitely can interest them.”

Mr. Trudeau has repeatedly highlighted gender equality as a central theme of Canada’s G7 presidency.

Oxfam Canada’s executive director, Julie Delahanty, said in a statement that she will be looking for clear and specific pledges in this area.

“Gender inequality and economic inequality are directly linked,” she said.

“Canada needs to lead the G7 in tackling the barriers that keep women at the bottom of the economic ladder.”

GDP

StatCan. 2018-05-31. Gross domestic product, income and expenditure, first quarter 2018

• Real GDP by expenditure, First quarter 2018: 1.3% increase (quarterly change, annualized)
• Source(s): CANSIM table 380-0064: http://www5.statcan.gc.ca/cansim/a26?lang=eng&retrLang=eng&id=3800064&&pattern=&stByVal=1&p1=1&p2=31&tabMode=dataTable&csid=
• National saving rate: 4.2%, First quarter 2018 
• Source(s): CANSIM table 380-0071: http://www5.statcan.gc.ca/cansim/a26?lang=eng&retrLang=eng&id=3800071&&pattern=&stByVal=1&p1=1&p2=31&tabMode=dataTable&csid=
• Household disposable income, First quarter 2018: 0.8% increase (quarterly change)
• Source(s): CANSIM table 380-0072: http://www5.statcan.gc.ca/cansim/a26?lang=eng&retrLang=eng&id=3800072&&pattern=&stByVal=1&p1=1&p2=31&tabMode=dataTable&csid=
• Terms of trade: 95.5 (2007=100), First quarter 2018
• Source(s): CANSIM table 380-0065: http://www5.statcan.gc.ca/cansim/a26?lang=eng&retrLang=eng&id=3800065&&pattern=&stByVal=1&p1=1&p2=31&tabMode=dataTable&csid=
• Debt service ratio: 13.86, First quarter 2018
• Source(s): CANSIM table 380-0073: http://www5.statcan.gc.ca/cansim/a26?lang=eng&retrLang=eng&id=3800073&&pattern=&stByVal=1&p1=1&p2=31&tabMode=dataTable&csid=

Real gross domestic product (GDP) grew 0.3% in the first quarter, following an increase of 0.4% in each of the previous two quarters. Final domestic demand rose by 0.5%.

Growth was moderated by a deceleration in household spending, lower exports of non-energy products and a decline in housing investment (-1.9%).

Chart 1: Gross domestic product and final domestic demand

Household spending grew 0.3%, the slowest pace since the first quarter of 2015. Growth was driven by increased outlays on services (+0.5%). Household spending on goods was unchanged, following 11 consecutive quarterly increases.

Export volumes rose 0.4% after increasing 1.0% in the fourth quarter of 2017. Exports of crude oil and crude bitumen (+9.9%) largely contributed to the gains. Exports of services grew 1.7% in the first quarter, following a 1.3% increase in the previous quarter.

Business investment in machinery and equipment (+4.2%) and intellectual property products (+3.3%) increased at a faster pace than in the fourth quarter of 2017.

Expressed at an annualized rate, real GDP was up 1.3% in the first quarter. In comparison, real GDP in the United States grew 2.2%.

Chart 2: Contributions to percent change in real gross domestic product, first quarter

Housing investment falls

Investment in housing fell 1.9% in the first quarter, the largest decline since the first quarter of 2009, due to a drop in ownership transfer costs (-13.5%). Lower resale activity coincided with new mortgage stress measures introduced nationwide in January. Business outlays on new construction slowed to 1.2% growth, while renovations increased 1.4%.

Chart 3: Investment in residential structures, new construction and ownership transfer costs

Consumer spending decelerates

Household final consumption expenditure decelerated for a third consecutive quarter, slowing to 0.3% in the first quarter. Outlays on goods were virtually unchanged, while outlays on services grew 0.5%.

Housing-related expenses (housing, water, electricity, gas and other fuels) increased 0.8% and outlays on insurance and financial services grew 1.5%. Purchases of vehicles were flat in the first quarter, following strong growth in 2017.

Non-residential investment increases

Investment in machinery and equipment rose 4.2% in the first quarter, with medium and heavy trucks, buses and other motor vehicles (+12.5%) and industrial machinery and equipment (+3.9%) contributing to the growth. Intellectual property products rose 3.3%, as mineral exploration and evaluation (+8.0%) rebounded and software (+3.2%) accelerated. Investment in non-residential structures increased 1.5%.

Export growth slows

Growth in export volumes slowed to 0.4% in the first quarter, following a 1.0% gain in the previous quarter. The first quarter growth was driven by exports of services (+1.7%), including commercial (+2.2%) and travel (+1.7%) services.

Exports of goods edged up 0.2%, as growth in crude oil and crude bitumen (+9.9%) and motor vehicles and parts (+2.0%) was partially offset by lower exports of refined petroleum energy products (-18.8%).

Imports rose by 1.2% in the first quarter, with similar increases in goods and services.

Growth in imports of goods was led by passenger cars and light trucks (+5.9%), tires, motor vehicle engines and parts (+6.0%) and basic chemicals and industrial chemical products (+8.6%).

Imports of services rose 1.1%, as those of commercial (+1.3%), transportation (+1.4%) and travel (+0.6%) services all increased.

Inventories continue to accumulate

Businesses added $15.2 billion to their inventories in the first quarter, following an accumulation of $15.9 billion in the previous quarter. Wholesalers (+$5.4 billion), manufacturers (+$4.0 billion) and retailers (+$2.6 billion) all added to their stocks. Farm inventories grew by $567 million, compared with an accumulation of $2.7 billion in the fourth quarter of 2017. The economy-wide stock-to-sales ratio increased from 0.760 to 0.765 in the first quarter.

Economy-wide income increases

Real gross national income (the real purchasing power of income earned by Canadian-owned factors of production) increased 0.5% in the first quarter, outpacing real GDP growth for a third consecutive quarter.

The GDP implicit price index, representing the price of goods and services produced in Canada, rose 0.3%. Export prices (+1.0%) increased at a faster pace than import prices (+0.7%), leading to slightly improved terms of trade.

Gross operating surplus (in nominal terms) grew 0.7%, led by increased earnings of energy producers.

Household disposable income rose by 0.8%, as compensation of employees was up 1.0%. The household saving rate edged down to 4.4%, with household spending slightly outpacing disposable income in the first quarter.

FULL DOCUMENT: http://www.statcan.gc.ca/daily-quotidien/180531/dq180531a-eng.pdf

StatCan. 2018-05-31. Gross domestic product by industry, March 2018

• Real GDP by industry, March 2018: 0.3% increase (monthly change)
• Source(s): CANSIM table 379-0031: http://www5.statcan.gc.ca/cansim/a26?lang=eng&retrLang=eng&id=3790031&&pattern=&stByVal=1&p1=1&p2=31&tabMode=dataTable&csid=

Real gross domestic product (GDP) rose 0.3% in March as 15 of 20 industrial sectors grew, led by the mining, quarrying, and oil and gas extraction sector.

Chart 1: Real gross domestic product rises in March

The output of goods-producing industries expanded 0.6%, mostly attributable to mining, quarrying, and oil and gas extraction. Manufacturing edged up while construction edged down.

Services-producing industries were up 0.2%, as increases in most sectors more than offset a decline in the finance and insurance sector.

Mining, quarrying, and oil and gas extraction continues to lead growth

The mining, quarrying and oil and gas extraction sector expanded 1.9% in March as all subsectors grew.

Chart 2: Mining, quarrying, and oil and gas extraction grows in March

The oil and gas extraction subsector was up 2.1%, the fourth increase in five months. Non-conventional oil extraction rose 3.1% as crude bitumen extraction in Alberta reached a record high 8.9 million cubic metres. Conventional oil and gas extraction rose 1.3% as growth in natural gas extraction more than offset a decline in conventional crude petroleum extraction.

Mining excluding oil and gas extraction (+0.8%) was up for a second month in a row after four months of declines. Non-metallic mineral mining rose 2.1% as all industries increased, led by potash mining (+2.8%). Metal ore mining edged up 0.1%, following four months of declines, as growth in iron ore (+8.9%) and gold and silver ore (+1.0%) mining more than offset a seventh consecutive decline in copper, nickel, lead and zinc mining (-4.7%) and other metal ore mining (-2.1%).

Support activities for mining and oil and gas extraction grew 2.1% in March as demand for drilling services increased.

Transportation and warehousing continues to grow

Higher output of natural gas and crude oil was a major contributor to the 0.8% increase in transportation and warehousing in March. Overall, seven of nine subsectors increased.

Pipeline transportation rose 5.6% in March, following a 0.8% decline in February. Pipeline transportation of natural gas (+7.9%) and crude oil and other pipeline transportation (+3.3%) both rose on higher exports to the United States.

Rail transportation increased 0.2% following two months of decline, as higher carloadings of grain and fertilizers and coal more than offset lower carloadings of metals and minerals and industrial and consumer products.

Air transportation (+0.5%) rose for a third consecutive month, while truck transportation increased 0.4%.

Wholesale and retail trade up

Wholesale trade rose 0.8% in March, offsetting the 0.8% decline in February, as six of nine subsectors grew. Building material and supplies wholesaling (+3.4%) led the growth, as all industry groups increased. Motor vehicle and parts wholesaling was up 2.9%, as motor vehicle wholesaling rose for the first time in four months on the strength of increased imports of passenger cars and light trucks.

Increased sales of imported motor vehicles contributed to the 0.6% rise in retail trade. Higher activity at new car dealers was the main reason for the gain. In retail trade, 7 of 12 subsectors were up, with notable increases in clothing and clothing accessories stores (+1.9%) and general merchandise stores (+1.6%). Gasoline stations (-1.9%) declined for a third consecutive month.

The largest monthly contraction in the finance and insurance sector in nine years
Following four months of growth, the finance and insurance sector declined 1.2% in March, the largest monthly contraction since November 2008.

An atypical decline in stock market trading activity in March was the main reason for the decreases in depository credit intermediation and monetary authorities (-1.0%) and financial investment services, funds and other financial vehicles (-3.2%). Insurance carriers and related activities (-0.5%) declined for the first time since October 2017 on lower premium revenue.

Manufacturing edges up

The manufacturing sector edged up 0.1% in March. The 0.3% growth in non-durable manufacturing was mostly offset by a 0.1% decrease in durable manufacturing.

Growth in non-durable manufacturing was led by a 7.0% increase in plastic and rubber products as plastic manufacturers built up their inventories. Chemical products manufacturing rose 2.9% with increases in most industry groups. Food manufacturing was down 2.5% as most industry groups declined.

In durable manufacturing, 6 of 10 subsectors increased. Machinery (-4.1%) manufacturing declined for the first time in five months. There were also declines in computer and electronic products (-2.0%) and electrical equipment (-1.8%) manufacturing, while transportation equipment (+1.2%), primary metal (+1.3%), miscellaneous (+2.8%) and wood products (+0.7%) manufacturing increased.

Construction edges down

Construction (-0.1%) was down slightly in March as declines in residential (-0.7%) and repair (-0.3%) construction offset growth in engineering and other construction activities (+0.4%) and non-residential construction (+0.6%).

Other industries

Real estate and rental and leasing edged up 0.1% in March following two months of declines. Activity at the offices of real estate agents and brokers (-1.8%) decreased for the third month in a row, following the implementation of new mortgage lending rules in January, including stress-testing for uninsured mortgages.

Professional, scientific and technical services expanded 0.4% as most industries grew. Computer systems design (+1.2%) continued to be one of the fastest-growing industries in the economy. Legal services declined 2.0% in the wake of the cooling real estate market and lower stock market activity.

The public sector was up 0.2% with all three components (education, health care and public administration) increasing.

Utilities grew 0.6%. Electric power generation, transmission and distribution rose 0.8% while natural gas distribution edged down 0.1%. Temperatures were seasonal in Eastern Canada while Western Canada was cooler than usual.

Accommodation and food services rose 0.5% as both food services and drinking places (+0.4%) and accommodation services (+0.6%) increased.

Agriculture, forestry, fishing and hunting edged up 0.1%.

Chart 3: Main industrial sectors' contribution to the percent change in gross domestic product in March

First quarter of 2018

The value added of goods-producing industries increased 0.6% in the first quarter, marking seven consecutive quarters of growth, while the value added of services-producing industries rose 0.3%. Growth in both goods-producing and services-producing industries was widespread as 14 of 20 sectors reported gains.

The main contributor to growth in the goods-producing industries was the construction sector (+1.4%), which rose for the sixth consecutive quarter. All components of the sector grew, with non-residential construction (+3.0%) growing at its fastest pace since the third quarter of 2013.

Manufacturing was up 0.4% as durable manufacturing rose 1.2%, while non-durable manufacturing declined 0.7%. Mining, quarrying, and oil and gas extraction was up 0.4%, marking the seventh consecutive quarter of growth. The gain stemmed from increased oil and gas extraction (+0.5%) and support activities for mining and oil and gas extraction (+2.9%), while mining excluding oil and gas declined 1.4%. Utilities rose 0.3% on the strength of a 3.8% rise in natural gas distribution. Agriculture, forestry, fishing and hunting declined 0.2%.

Growth in the services-producing industries was led by the public sector (+0.7%), finance and insurance (+0.8%) and professional, scientific and technical services (+0.9%). In finance and insurance, financial investment services were up 3.4% following declines in the previous two quarters. Transportation and warehousing rose 1.0% with increases in most subsectors. Wholesale trade (+0.4%) had its slowest growth in more than a year. Retail trade (-0.9%) registered its first quarterly decline since the second quarter of 2016. The output of real estate agents and brokers (-13.7%) fell to its lowest level since the first quarter of 2014.

FULL DOCUMENT: http://www.statcan.gc.ca/daily-quotidien/180531/dq180531b-eng.pdf

REUTERS. MAY 31, 2018. Canada economic growth cools in first quarter on slower exports, housing
Leah Schnurr

OTTAWA (Reuters) - Canada’s economy grew at its slowest pace in nearly two years in the first quarter amid cooler exports and a weaker housing sector, though growth was still seen as strong enough for the central bank to raise interest rates again before long.

Gross domestic product grew at an annualized rate of 1.3 percent in the first three months of 2018, Statistics Canada said on Thursday, short of expectations for 1.8 percent and slower than the fourth-quarter’s unrevised 1.7 percent.

It was the slowest growth since the second quarter of 2016, when the economy contracted following wildfires in Alberta.

Still, the first quarter matched the Bank of Canada’s forecast, which economists said could keep the central bank on track to raise interest rates again in July.

The bank held rates steady on Wednesday but dropped cautious language about future rate moves in a signal that higher borrowing costs could come as soon as its next meeting.

Economic growth of 0.3 percent in March also suggested there was momentum heading into the second quarter.

“I would still be comfortable looking for a July hike,” said Doug Porter, chief economist at BMO Capital Markets.

“I think we are going to get indications over the next month or so that the second quarter will look a fair bit better.”

The bank has raised rates three times since July 2017. Bets that it will hike rates again in July were at 64.7 percent after the data. The Canadian dollar weakened against the greenback. BOCWATCH [CAD/]

On a non-annualized basis, housing investment declined 1.9 percent, the biggest drop since the first quarter of 2009 as a fall in ownership transfer costs pointed to lower resale activity.

Canada’s housing market has cooled in recent months amid higher borrowing costs and tighter mortgage rules that came into effect in January.

Consumers spent less in the quarter, with household spending growing just 0.3 percent, the slowest pace since the first quarter of 2015 when the economy was hit by tumbling oil prices.

The purchase of vehicles was flat after record growth last year, while Canadians spent less on items like food and household furnishings.

Exports slowed due to lower shipment of non-energy goods, which offset growth in crude and bitumen exports, as well as services.

Business investment picked up, with firms buying more vehicles, machinery and equipment, though an increase in imports also subtracted from overall growth.

Additional reporting by Fergal Smith in Toronto; Editing by Bernadette Baum

EMPLOYMENT

StatCan. 2018-05-31. Payroll employment, earnings and hours, March 2018

• Average weekly earnings — Canada: $997.34; March 2018: 3.1% increase (12-month change)
• Source(s): CANSIM table 281-0063: http://www5.statcan.gc.ca/cansim/a26?lang=eng&retrLang=eng&id=2810063&&pattern=&stByVal=1&p1=1&p2=31&tabMode=dataTable&csid=

Average weekly earnings of non-farm payroll employees were $997 in March, unchanged from the previous month. Earnings were up 3.1% compared with 12 months earlier, mostly due to increases in the last six months of 2017.

Chart 1: Year-over-year change in average weekly earnings and average weekly hours

In general, changes in weekly earnings reflect a number of factors, including wage growth; changes in the composition of employment by industry, occupation and level of job experience; and average hours worked per week.

Non-farm payroll employees worked an average of 32.9 hours per week in March, up from 32.8 hours in February and 32.6 hours in March 2017.

Average weekly earnings by sector

Compared with 12 months earlier, average weekly earnings increased in 6 of the 10 largest industrial sectors, led by accommodation and food services. At the same time, earnings were little changed in wholesale trade, educational services, manufacturing, and administrative and support services.

Chart 2: Year-over-year change in average weekly earnings in the 10 largest sectors, March 2018

In accommodation and food services, average weekly earnings rose 6.6% to $404. Earnings in the sector have been on an upward trend since March 2017. Gains were driven by full-service restaurants and limited-service eating places and, to a lesser extent, by traveller accommodation. The increase in the sector was largely the result of growth in Ontario, where earnings in this sector have been on an upward trend since early 2017.

For payroll employees in retail trade, average weekly earnings rose 5.1% to $599, continuing an upward trend that began at the end of summer 2017. The growth was driven by increases in general merchandise stores, and in building material and garden equipment and supplies dealers. Earnings in the sector were up in most provinces, driven by Ontario, British Columbia and Quebec.

Average weekly earnings in construction grew 4.8% to $1,265 in March, almost entirely driven by gains in specialty trade contractors. Most provinces experienced earnings growth in the 12 months to March, with Ontario, Quebec and Alberta largely responsible for gains in the sector. On the other hand, average weekly earnings in construction declined in Newfoundland and Labrador, the lone decrease among the provinces.

In public administration, earnings grew 4.5% on a year-over-year basis to an average of $1,295 per week. Payroll employees in local, municipal and regional public administration recorded the largest percentage growth in average weekly earnings. Provincially, earnings growth was led by Ontario and Quebec.

Earnings in professional, scientific and technical services rose 2.5% to an average of $1,381 per week, boosted by growth in Quebec, Ontario and British Columbia. Employment gains in the high-paying computer systems design and related services industry, as well as gains in average weekly earnings in the architectural, engineering and related services industry, contributed the most to the earnings growth in the sector.

Average weekly earnings in health care and social assistance rose 1.5% to $893, with growth in most provinces. Ambulatory health care services contributed the most to the rise.

Average weekly earnings by province

In the 12 months to March, average weekly earnings of non-farm payroll employees increased in seven provinces, led by Quebec. At the same time, earnings were little changed in Nova Scotia, Saskatchewan and Newfoundland and Labrador.

Chart 3: Year-over-year change in average weekly earnings by province, March 2018

Average weekly earnings in Quebec rose 4.0% to $931, continuing an upward trend that began at the end of summer 2016. Earnings growth was widespread across the sectors, with professional, scientific and technical services; public administration; manufacturing; and construction accounting for a majority of the increase.

In Ontario, average weekly earnings increased 3.2% to $1,014. Earnings have been relatively stable, following a period of growth from August to December 2017. Finance and insurance, public administration and construction were the largest contributors to earnings growth in the province.

In British Columbia, average weekly earnings rose 2.9% to $962. Earnings increased in many sectors, with retail trade; educational services; wholesale trade; and professional, scientific and technical services contributing the most to the rise.

Average weekly earnings in Alberta were up 2.6% to $1,149 in March. Construction, along with real estate and rental and leasing, contributed the most to the year-over-year growth.

In New Brunswick, average weekly earnings rose 2.6% to $904. Earnings were up in a majority of sectors, driven by increases in health care and social assistance, public administration, and real estate and rental and leasing. A notable decline in information and cultural industries moderated earnings growth in the province.

Average weekly earnings in Manitoba were up 2.4% to $931. Earnings increased in most sectors, with manufacturing, retail trade, and real estate and rental and leasing contributing the most to the rise. On the other hand, these gains were moderated by an employment decline in the high-paying finance and insurance sector.

In Prince Edward Island, average weekly earnings were up 2.3% to $840 in March. Growth in health care and social assistance contributed the most to the increase.

Non-farm payroll employment by sector

In March, the number of non-farm payroll employees was up 39,900 from February. The number of payroll jobs increased notably in professional, scientific and technical services; retail trade; health care and social assistance; and wholesale trade. At the same time, the number of payroll jobs declined in information and cultural industries.

Compared with March 2017, the number of payroll employees rose by 375,200 (+2.3%). Increases were observed across a majority of sectors, led by manufacturing (+46,100 or +3.1%) and health care and social assistance (+43,000 or +2.3%).

The number of payroll jobs also increased notably in professional, scientific and technical services (+40,100 or +4.5%); educational services (+37,300 or +2.9%); public administration (+33,500 or +3.1%); and wholesale trade (+29,200 or +3.8%). At the same time, a decline was observed in information and cultural industries (-9,000 or -2.6%).

FULL DOCUMENT: http://www.statcan.gc.ca/daily-quotidien/180531/dq180531c-eng.pdf

INTERNATIONAL TRADE

EDC. May 31, 2018. WEEKLY COMMENTARY. Upsurge of investment. The economy’s small but mighty “David” rises again!
Peter Hall, Vice-President and Chief Economist

If consumption is the economy’s Goliath, then investment is likely its David: that small but mighty element that time and again comes to our economic rescue, and creates wonderful tomorrows. For all its importance, David often takes a back seat to the headline-grabbing Goliath. Just how is investment doing these days? Do we have good reasons to be upbeat about its near-term prospects?

The role investment plays in the economy

Before answering, a quick primer on the critical role investment in physical assets plays. At best, consumption gives us great todays. It keeps us going, for now. In contrast, investment is all about future goods and services. It creates the capacity to produce the stuff of tomorrow’s needs. In any economy, the sum of all investments, both past and present, is a great gauge of an economy’s ability – or lack of ability – to perform in the future. In fact, the stock of capital in any economy is one of three critical pillars of that economy’s calculated potential. As such, it is critical to know how current investment is building on that capital stock.

The news isn’t great. Truth be told, the entire planet has done a sketchy job of investing over the past eight years. That might not seem like a long time in the grand scheme of things, but when it comes to investment, in the minds of many, it’s an eternity. Back in the early 1970s investment across the developed world averaged annual inflation-adjusted growth of over 6 per cent. In the late 1970s, it slid to 5 per cent, maintaining that pace through the 1980s. In the 1990s, the average was 4 per cent, and it slid to 3.5 per cent in the 2003-07 phase. Post-recession investment growth hit a new low, averaging just 2.9 per cent annually. Exclude the public stimulus years, and growth averaged just 2.6 per cent. Yikes!

Purists would counter that the economy probably didn’t need any more investment; if so, businesses would have seen the opportunity, and simply done more. If that’s so, then it’s strange to see that after an extended period of relatively weak overall growth, OECD economies are currently faced with tight capacity constraints. Current capacity utilization is about as tight as it ever gets in both the US and Europe.

Why are we under-investing?

Have we collectively under-invested? It seems so; but why? Globally, we over-invested at the end of the last cycle, in order to keep up with a protracted bubble of excess consumption. Globalization exported this bubble everywhere, and when it burst, our initial, necessary under-investment lasted so long it became a habit. What it has failed to do is accurately predict the tipping point when demand would once again require a return to more normal investment growth. In that sense, our current capacity constraints are self-imposed; we have the capacity to create additional capacity, but we are bound in a low-growth mindset that market signals are trying to jolt us out of. Nascent trends suggest it’s working, but only time will tell.

The relationship between interest rates and investment
Are rising interest rates the spoiler? Indeed, there is a negative relationship between financing costs and investment. But there are at least three mitigating factors.

1. Interest rates have been ultra-low for ultra-long, and while the shift in this regime will require adjustment, rates will still on average compare favourably with historical averages. 
2. Rates will ultimately rise everywhere, increasing financing costs uniformly across most of the developed world.
3. Investment is now accelerating in spite of interest rate increases, leading us to wonder what the ramp up might look like if rates had remained static.

Investment in emerging markets

Emerging markets have their own unique investment story to tell. Larger emerging economies filled the post-recession investment void with massive public stimulus programs, which in certain key cases, notably China, created vast surplus capacity. Other markets took advantage of far lower financing costs to undertake ambitious investment projects. Rising activity in the developed world is now helping to sop up this surplus, and we expect a concurrent return of private investment as a driving force in the emerging world over the medium term.

The bottom line?

For years, investment has been small, and not so mighty. It seems to be rediscovering its strength, and if current momentum continues, it will increase the capacity to grow for many tomorrrows.

INTELLECTUAL PROPERTY

Canadian Intellectual Property Office. 2018-05-30. Launch of Public Consultations on the new Industrial Design Office Practice Manual

The Canadian Intellectual Property Office (CIPO) is conducting public consultations on the new Industrial Design Office Practice Manual (IDOP). Canadians are encouraged to provide feedback between May 30, 2018 and June 29, 2018.

The IDOP is an important tool for communicating CIPO's internal office practices and procedures to clients; it is the primary public source for information on how to file and prosecute an application for industrial design registration in Canada.

The new IDOP sets out how CIPO will operationalize the regulatory and legislative changes necessary for Canada to accede to the Hague Agreement Concerning the International Registration of Industrial Designs (the Hague Agreement). It also includes various elements which support the modernization of Canada's industrial design regime and the delivery of improved services for clients.

The Hague System provides businesses with access to an international system to file and manage industrial design applications in multiple countries through a single, streamlined process.

The Government is in the process of finalizing the Industrial Design Regulations, information technology system updates and the Hague Agreement accession arrangements with the World Intellectual Property Organization (WIPO), with the view to a coming into force date in late 2018.

The new IDOP has been developed in close collaboration with stakeholders. Feedback received to date has informed a number of revisions, which are reflected in the draft posted for public consultation. Additional comments received will be taken into account prior to finalizing the new IDOP.

FULL DOCUMENT: https://www.canada.ca/en/intellectual-property-office/news/2018/05/launch-of-public-consultations-on-the-new-industrial-design-office-practice-manual.html

COMPETITION

Competition Bureau Canada. May 30, 2018. Competition Bureau releases 2018-19 Annual Plan: Building trust to advance competition in the marketplace

OTTAWA, ON – The Competition Bureau has published its 2018-19 Annual Plan: Building trust to advance competition in the marketplace.

The Annual Plan details the Bureau’s priorities for the coming year as it continues to foster competition and innovation in Canada while building trust with consumers and businesses. These priorities include tackling high-impact cases that make a real difference in the everyday lives of Canadians, such as the Bureau’s ongoing investigations into bread price-fixing in the grocery sector. The Bureau will also prioritize consumer-focussed cases in the digital economy, and target deceptive marketing practices in the health and biosciences sector.

In addition to enforcing Canada’s competition laws, the Bureau will advance competition in the marketplace in 2018-2019 by:

• Empowering consumers and businesses with timely and accurate information to make informed decisions;
• Launching a study to help Canadians understand digital pricing practices and how they affect competition;
• Using a range of advocacy tools, including a market study, to promote increased competition and innovation in regulated sectors of the economy;
• Updating its Abuse of Dominance Enforcement Guidelines to clarify its approach to abuse of dominance cases;
• Increasing transparency on its approach to market studies by publishing a revised Market Studies Information Bulletin;
• Conducting a study focused on efficiencies to stimulate discussion and support merger enforcement;
• Providing leadership by sharing competition expertise, knowledge and insight with various levels of government, sector regulators, businesses and consumers. 

Publication of the Annual Plan follows a public consultation period during which Canadian consumers and other stakeholders were invited to submit comments on a draft version.

FULL DOCUMENT: https://www.canada.ca/en/competition-bureau/news/2018/05/competition-bureau-releases-2018-19-annual-plan-building-trust-to-advance-competition-in-the-marketplace.html

BUDGET

Department of Finance Canada. May 30, 2018. Investing in Canada's National Interest: Minister Morneau Speaks to Calgary Chamber of Commerce

Calgary, Alberta – Investing to grow the economy, create jobs, strengthen the middle class, and help people working hard to join it—that's the Government of Canada's commitment to Canadians.

Finance Minister Bill Morneau today spoke to business leaders at the Calgary Chamber of Commerce about the Government's plan to secure Canada's economic future—a plan that includes getting Canada's resources to world markets. A key topic of discussion was the Government's recent commercial agreement with Kinder Morgan to secure the timely completion of the Trans Mountain Expansion Project.

By guaranteeing the resumption of work for the summer construction season and ensuring that construction continues through the 2018 season, the Government is protecting thousands of middle class jobs in Alberta and British Columbia, preserving Canada's reputation as a good place to do business, and making a sound investment in Canada's future.

Minister Morneau also discussed the Government's investments in skilled workers, modern infrastructure, global trade and science and innovation, and the Government's efforts to encourage greater workforce participation so that Canada can continue to compete globally and succeed. These investments will deliver long-term growth that works for everyone, while ensuring that Canada remains one of the best places in the world to start, grow, and invest in a business.

Quote

"We know that Canada's long-term competitiveness rests on things like giving more people more opportunities to work, making sure Canadians have the right skills and opportunities, and ensuring that we can get our resources to world markets while expanding opportunities through sound global trade deals. The facts show that business confidence and investment is up, and growing faster than it has in five years. Now is the time to build on that success by continuing to invest in the things that will secure Canada's economic success today, and for years to come."

- Bill Morneau, Minister of Finance

Quick Facts

The Government is investing to help Canadians succeed and securing Canada's economic future with:

• More modern and resilient infrastructure that moves people more efficiently and gets goods to market more quickly and safely.
• Greater investments in people, so that Canadian workers will gain the skills they need to compete for jobs in the new economy, middle class families will have more help with the high cost of raising their kids, and people working hard to join the middle class will have more opportunities to succeed.
• Better support for innovation and science, so that Canadian businesses and workers will be more productive, and better able to compete globally.
• Trade and investment deals that are comprehensive and progressive, so Canadian businesses will have better access to global markets and the billions of customers they represent, and the benefits of growth can be felt by more and more people here at home, and around the world.

FULL DOCUMENT: https://www.fin.gc.ca/n18/18-039-eng.asp

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LGCJ.: