US trade tariffs pushing Canada towards Europe and China
US trade tariffs have pushed Canada towards a closer economic relationship with Europe and China, say leading audit, tax and business advisory firm, Blick Rothenberg.
Melissa Thomas, a director at the firm, said: “The Canadian prime minister, Mark Carney and Canadian investors aren’t waiting around for the US to U-Turn on its tariffs. They are looking elsewhere for Canada’s future, including towards Europe and China.”
She added: “Canadian investors acquired $15.2bn in foreign equity securities in November. This was led by non-US shares, mainly targeting the European market, at a value of over $8.9bn. This is the highest monthly investment in non-US shares since April 2022.”
Melissa said: “The Canadian government is proactively looking for economic opportunities outside of the US due to the uncertainty created by its trade tariffs. Mark Carney recently instigated trade discussions with the Chinese leader Xi Jinping, resulting in both countries agreeing to lower levies on certain goods.”
She added: “The reduction of tariffs on Chinese electric vehicles stands out in particular. They are being set at a ‘most favoured-nation’ rate. This is the standard tariff rate a country applies to imports from another World Trade Organisation (WTO) member. Chinese EVs will be subject to a 6.1% tariff and a quota of 49,000 vehicles. The tariff currently sits at 100%, making this quite a substantial reduction.”
Melissa said: “The UK government is probably watching this with interest, although the desire to maintain the “special relationship” with the US will mean that the UK is unlikely to enter into any “most favoured nation” arrangements with Canada over those that already exist with the US.”
She added: “The influx of Chinese electric vehicles into the UK (and EU) in recent years has led to some pushing for a minimum price mechanism to stop them from undercutting non-Chinese electric vehicle manufacturers. Only time will tell if Mark Carney will see calls for similar pushback in Canada.”