A sharp escalation in U.S.-China trade tensions will likely dampen commodity prices and keep Canadian capital investments in a tight holding pattern when they ought to be taking off, analysts say.
“We are 10 years into a cycle and normally this is the natural point where capital spending starts to pick up in a meaningful way,” Porter said. “But it’s not happening. That’s partly due to concerns about pipeline capacity but also trade uncertainty. It’s that indirect channel that’s of greatest risk to Canada at this point.”
Analysts were less concerned, indicating the tussle over currency manipulation is expected to have few practical implications. Indeed, the move represents a two per cent change during a year when the currency has already moved by 10 per cent, suggesting the shift is largely symbolic, said Porter. However, the escalation in trade tensions between the world two biggest superpowers is far from good news for Canada.
Canada is a trading nation and the rules of trade are changing because the biggest economy in the world says it doesn’t like how things are going Trade represents a quarter of the Canadian economy, more than double that of the U.S. at 12 per cent. What’s more, Canada has been directly caught in the tensions between the U.S. and China following the arrest of Huawei chief financial officer Meng Wanzhou in Vancouver on Dec. 1. The arrest, made on a U.S. extradition request, was followed by the detentions of Canadian citizens in China in apparent retaliation and restrictions on purchases of Canadian canola and other commodities.
eamorris_ Canada would have benefited from a US-China trade battle but the Turd arrested the Hauwei women at Trumps request. Talk about being played for a fool. TrudeauMustGo
Families of Canadians held by China will be glad to know that “Skippy Scu um ba ag” & Liberals are busy marching in parades in various cities again this month. He’ll get to you ... maybe about same time he balances the budget. CdnPoli TrudeauMustGo globeandmail globalnews