“We need to have those capabilities in Canada. We need to have those jobs in Canada. It constitutes a huge part of our industrial complex, both in Ontario and Quebec,” Ambassador Mark Wiseman told Reuters.

“From the Canadian perspective, the preservation of a robust assembly and parts industry in Canada is critical,” he added.

Wiseman’s pushback comes after Trump’s move to impose 50% tariffs on USD 20 billion in Canadian goods as bilateral trade talks collapsed a week before. Unresolved issues that pulled down the discussions included whether to cut tariffs on medium- and heavy-duty vehicles.

Canada has responded with USD 20 billion in tariffs that will take effect September 8. Trump’s new tariffs hit sectors including wine, furniture, dairy products, cement, clothing, fishing rods, and hockey equipment.

The duties do not exempt Canadian products under a three-nation trade deal that also includes Mexico and has shielded most Canadian exports to the United States in the past 18 months.

“We ‌will ⁠continue to talk so long as talking and negotiation are producing positive momentum. So we’re not picking up our toys and going home, but we have a plan. We have resolved. We’re not moving out of the neighborhood, neither is the United States,” Wiseman said, while expressing hope about the trade deal getting done.

Wiseman stated that the US congressional elections in November did not influence the selection of tariff targets for Canadian retaliation. Asked if Ottawa is considering more drastic measures, the official refused to divulge further details.

From the American side, Commerce Secretary Howard Lutnick has defended his administration’s handling of the Canada trade talks.

The post No US trade deal without Canadian auto sector, Ottawa says amid trade war appeared first on International Finance.

The trade arrangement, which encompasses a market of over 500 million consumers, is currently uncertain. The treaty, which replaced the NAFTA (North American Free Trade Agreement) in July 2020, requires a joint formal review on its sixth anniversary from all three participating nations to consider a 16-year extension.

The post Canada-US trade war: Honda reconsiders North American expansion appeared first on International Finance.

Ebrard’s statement came just hours before the breakdown in negotiations between the Washington and Ottawa, a development which has now cast a shadow on the future of USMCA (United States-Mexico-Canada Agreement), that covers trade, digital commerce, intellectual property, and labor/environmental rules among the US, Mexico, and Canada.

“Mexico is pursuing its own track with the United States and would need to see the final published terms of any US-Canada arrangement before making a full assessment,” Ebrard said on Friday (August 21), just hours before Washington and Ottawa decided to move away from the negotiation table, resulting in Trump imposing 50% tariffs on a range of Canadian goods, a move that he kept previously on hold, as both sides were expecting a win-win deal on the trade front.

The failed negotiations between the US and Canada were focused on avoiding the new Section 338 tariffs and resolving a set of bilateral trade disputes, including Washington’s complaints about Ottawa’s dairy quota system, provincial restrictions on American alcohol sales, and retaliatory Canadian duties on some ‌US-built ⁠autos and steel.

The breakdown in negotiations also coincides with the broader 2026 review of the USMCA.

In July, the Trump administration declined to extend the pact for a fresh 16-year ⁠term, triggering a process of annual reviews while the agreement remains in force through 2036 unless the three countries later agree to extend it.

US Trade Representative Jamieson Greer aimed to secure interim arrangements with both Mexico and Canada this year, while deferring more complex issues such as automotive rules of origin, labor, and environmental standards until 2027.

The post USMCA hangs in balance as US-Mexico talks take centre stage after Canada breakdown appeared first on International Finance.

The White House has been relentless in terms of persisting with Trump’s vision of a near-global tariff, despite the United States Supreme Court’s February 2026 verdict, that shot down the Republican’s “reciprocal” duties of 10% to 50%, that were imposed ‌under a national emergencies law to try to shrink Uncle Sam’s trade deficit.

The new tariffs, announced in a Federal Register notice, cover 99.4% of US imports. They also include numerous product exemptions, such as oil and gas, fertilizer, and certain food items.

“The United States has had a forced labor import ban for nearly a century and rigorously enforces it. It’s well past time for our trading partners to do the same. Today’s action will begin to correct what is both a human rights abuse and a distortive trade practice to improve the welfare of workers everywhere,” US Trade Representative Jamieson Greer said while announcing the tariffs.

Imposed under Section 301 of the Trade Act ⁠of 1974, the new duties allow the Trump administration to maintain a tariff floor on virtually all US imports despite the Supreme Court setback. Also, Section 301 has a prior history of surviving court challenges.

Argentina, Bangladesh, Britain, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, and Trinidad and Tobago will face a 10% tariff on their exports. The European Union, Taiwan, Japan, South Korea, and Switzerland have been assigned rates that, combined with pre-existing most-favored-nation (MFN) tariff rates, totaled 10% or 12.5%.

Vietnam, which issued a new decree this week to ban imports of goods made with forced labor, has been kept at the 12.5% slab. China, often accused by Washington of detaining Uyghur minorities in work camps, got featured in the same bracket too.

For the countries already having trade deals with Washington, the new forced labor duties would not push them above the caps decided under the bilateral arrangements.

However, the action has drawn stronger protests from trade partners like Australia and Brazil, who described the new tariffs as unjustified and said they would seek to have them removed, while Norway said there was “no basis” for them.

Canada, hit on Monday with new Trump tariffs on USD 20 billion worth of goods, saw its minister in charge of US trade, Dominic LeBlanc, commenting, “We will continue engaging constructively with the United States on this matter, as well as other outstanding issues, over the coming ⁠weeks to the mutual benefit of our citizens.”

However, the response from Prime Minister Mark Carney was a severe one, as he said, “Canada ‌will do whatever it takes to defend itself in a trade war with the United States, including possible retaliatory measures. We are intensifying our trade negotiations with the United States and will not hesitate ⁠to defend our interests if we have to.”

Carney, who was attending a meeting of provincial premiers after Washington’s new 50% tariff announcements, which would take effect on August 19, described the whole situation as an “unwarranted” one.

While Trump and Carney previously agreed to intensify bilateral trade talks, Washington’s latest tariff aggression, along with the White House’s non-commitment on extending the United States-Mexico-Canada Agreement (USMCA) for another 16 years, have complicated things now.

The US is negotiating with Canada and Mexico on separate tracks, and Washington has said it is making more progress with Mexico. As per the analysts, this statement also raises the risk of Uncle Sam possibly seeking to force concessions on Canada that Mexico agrees to.

Talking about the US-Mexico talks, officials from both nations will meet for a fourth round of negotiations to revamp ‌the North American trade pact in September, after talks this week exposed disagreements over changes to automotive content rules and other issues.

Greer met with Mexican President Claudia Sheinbaum and Economy Minister Marcelo Ebrard this week during a third round of talks over the USMCA. The officials discussed sectors like autos, economic security, labor, agriculture, and electronic payment services, as well as steel and aluminum products.

While the US and Mexico are neogtiating the six-year-old USMCA, which underpins nearly USD 1.6 trillion in regional trade that was once duty-free, if the negotiations spill into 2027, it will only result into a prolong business and investment uncertainty, something that both Mexico and Canada have been seeking to ease with Uncle Sam.

Washington has been demanding that vehicles contain 50% of US-made content to qualify for preferential market access into the world’s largest economy. The proposal, however, has been a non-starter for the Mexican government, with reports suggesting that the Latin American nation being unwilling to accept “even 1%” of American content, as ‌such a ⁠provision “opens the door for a potential increase in the future” and sets a “problematic precedent.”

“Under the current trade pact, vehicles must contain 75% North American content to qualify for duty-free treatment, with 40% produced by workers earning at least USD 16 per hour—a threshold met in the US and Canada. The agreement, however, does not require that a fixed share of content come from any one country,” sources told the Reuters.

Mexico also wants Washington to reduce “Section 232” national security tariffs of 25% on autos and 50% on steel and aluminum before making concessions on other issues. But Trump has shown no sign of easing the tariffs.

The auto tariffs have also put Mexican auto factories at a cost disadvantage to competitors in Japan, South Korea, and the European Union (EU), which face a 15% levy to export cars to the US with no regional content requirements.

The US has reportedly nudged Mexican officials to propose alternative ways to meet Trump’s goals ⁠of bringing more automotive production back to the American shores, displacing Asian components (read China) in the North American supply chain, and reducing Washington’s trade deficit with Mexico.

The post Amid USMCA uncertainties, Trump imposes fresh tariffs on 60 economies appeared first on International Finance.

The three-day talks, which do not include Ottawa, are also the first formal discussions on changes to the US-Mexico-Canada Agreement since the Trump administration decided not to extend the six-year-old regional trade pact on July 1.

As the USMCA faces the threat of being shut down within 10 years if the three countries don’t agree on changes, the US Chamber of Commerce has already urged Trump to keep intact the trade pact’s trilateral structure, tariff-free access and strong enforcement that underpin exchange of goods worth USD 1.6 trillion across the North America.

US Trade Representative Jamieson Greer has already laid out his administration’s number one priority: Making sure Washington, through the USMCA talks, lowers its trade deficits with Canada and Mexico, apart from reshoring ⁠more manufacturing to mainland America.

The United States’ trade deficit with Mexico, in 2025, grew by USD 28 billion, or 17%, to USD 197 billion, according to data from the US Census Bureau, which comes under the Commerce Department. The trade gap with Canada, on the other hand, fell by USD 12.9 billion, or 21%, last year to USD 48.3 billion.

“We want the outcomes to make sense. We want to have more auto manufacturing here, and we’re seeing it,” Greer told CNBC, citing moves by automakers to open new assembly capacity in the US, including Toyota’s expansion of a Texas plant to build trucks now assembled in Mexico.

General Motors will incur some USD 1.5 billion in expenses this year in part to move some vehicle production to the US. In 2025, the Detroit automaker has disclosed plans to build two Chevrolet SUV models in the world’s largest economy while shifting some of its manufacturing from Mexico from 2027 onwards.

“That’s the outcome that (Trump) wants. I think also if we can have an arrangement with Mexico, with Canada, that we are trying to emphasize Canadian, Mexican, and US content in goods traded in North America, that’s a good outcome because that helps get supply chains back here in North America,” Greer added.

During bilateral USMCA talks with Mexico in May this year, in a significant departure from the existing provisions, USTR proposed requiring that 50% of the value of North American-built vehicles originate in the United States. The demand will be a difficult one to meet for the automakers in terms of making logistical changes in their highly integrated regional supply chains.

Mexico’s new ambassador to the US, Roberto Lazzeri, said that the Latin American country was expecting to reach a new deal by the 2026-end, and that he thinks the United States and Canada are aiming for the same goal.

“Every moment that we’re losing, I think we are losing competitiveness, market share, and investment, so it’s in the best interest of all three of us to get to a position of resolution soon. Mexico shares the Trump administration’s goal of bringing more manufacturing to North America, including to the US,” said Lazzeri, a former investment banker and finance ministry official.

Talking about the new tariff warfare between the United States and Canada, the Trump administration’s new levies on nearly USD 20 billion worth of Canadian goods came as a response against Ottawa’s import taxes on American autos, steel, aluminum, and dairy, as well as provincial alcohol bans.

That move deepens a rift that has kept Canada largely sidelined in the USMCA negotiations, as Greer has said there has been little movement towards concessions.

Defending the Trump administration’s decision, Treasury ‌Secretary Scott Bessent, during an interaction with the Fox Business Network, accused the Mark Carney government of being “highly discriminatory” on dairy products, apart from ⁠pointing toward US alcohol and beverages being moved from Canadian shelves.

“This is really just ⁠reciprocity in terms of what they’ve done to our great US ⁠companies,” Bessent told the “Mornings with Maria” program.

Mexico has found appreciations for itself, with Greer lauding the Latin American nation for its “lack of retaliation to US tariffs” and “pragmatic” approach to negotiations that include working to align Mexico’s export controls with those of the Uncle Sam, steps to ⁠protect intellectual property rights (IPR) and moving to curb the export of avocados grown on illegally deforested land.

As per Greer’s office, the talks in Mexico City will dig into technical details of the US-Mexico trade in crucial sectors like autos, steel, aluminum, agriculture, and labor.

The discussions will also focus on “economic security,” USTR’s term for raising regional trade protections to keep China and other Asian countries from using Mexico and Canada to access the lucrative American market ⁠on preferential terms.

The China point will be a contentious one, given Beijing’s growing footprint in Mexico’s car market.

As per the new distribution figures, Chinese car sales rose 30% in the first half of 2026, despite 50% tariffs imposed in January, with Chinese brands raising their market share to 17% from 14% a year earlier.

The post USMCA review: US and Mexico resume trade talks amid Canada tariff dispute appeared first on International Finance.

Factories on both sides of every border pass parts back and forth. A car built in Michigan contains components machined in Ontario and wiring from Monterrey. The arrangement, now formalised under the United States-Mexico-Canada Agreement, underpins roughly $1.6 trillion in annual trade between the three countries. It has made North America one of the most tightly integrated manufacturing regions on Earth.

That arrangement is now under serious strain. The second Donald Trump administration has used its opening years to challenge the foundations of the deal, deploying tariffs, legal threats, and negotiating pressure to push both neighbours toward a version of the agreement that serves American interests far more narrowly.

Formal bilateral talks between the United States and Mexico began in Mexico City on May 28. Canada has been left out of those opening rounds entirely. On July 1, the agreement faces its first mandatory review, at which all three countries must decide by consensus whether to extend it for another 16 years.
The outcome of that review will shape the economic geography of North America for decades. To understand what is at stake, it helps to start at the beginning.

How the Integrated Economy Was Built

NAFTA, signed in 1993, was the agreement that first stitched the three economies together. Earlier, each country maintained its own tariffs and trade barriers, and manufacturers largely sourced components domestically, or from global suppliers.

NAFTA changed the incentive structure fundamentally. If you could produce something more cheaply across the border, it suddenly made sense to do so. Over the following decades, supply chains reorganised themselves around that logic.

By 2024, the total value of goods and services moving between the three countries had reached an estimated $1.93 trillion annually. Canada and Mexico are now the United States’ two largest trading partners, ahead of China. The depth of integration shows up in a striking statistic.

Nearly 74 cents of every dollar of manufactured goods exported from Mexico to the United States contains value that originated somewhere within North America. For vehicles and automotive parts specifically, that figure rises to nearly 77 cents. The borders between the three countries have, in economic terms, become largely administrative lines that goods cross and recross during production.

The USMCA, which replaced NAFTA in July 2020, was meant to modernise this arrangement. It updated rules around digital trade, labour standards, and intellectual property. It also tightened the rules that determine whether a manufactured good qualifies for duty-free status, most notably in the automotive sector.

The Tariff Shock of 2025

The first major disruption to this integrated system came on February 1, 2025, when the Trump administration announced near-universal tariffs of 25% on all imports from Canada and Mexico. The stated justification was national security.

The administration claimed that illegal immigration and fentanyl trafficking from both countries constituted an emergency under a law called the ‘International Emergency Economic Powers Act’, which gives the president broad powers in genuine crises.

The move sent immediate shockwaves through integrated industries. At Port Laredo, which handles a large share of US-Mexico vehicle trade, imports of vehicles fell by $4.1 billion in the first half of 2025. Metals imports across the border dropped by more than 13%. Canada responded quickly, announcing 25% retaliatory tariffs on $30 billion of American goods, then another $29 billion.

Ottawa prepared a third package worth $125 billion. The integrated economy that had been built over three decades was suddenly operating under conditions it had never been designed for.

The administration eventually exempted goods that met USMCA’s rules of origin from the universal tariffs, meaning most trade between the three countries continued duty-free. But the tactic had demonstrated something important. Washington was willing to use the threat of comprehensive tariffs as a lever.
That lever broke in February 2026. The US Supreme Court ruled 6-3 that the International Emergency Economic Powers Act does not actually give the president authority to impose tariffs unilaterally. The court held that levying tariffs is a power reserved to Congress, and that it had not been properly delegated to the executive branch. The ruling invalidated the administration’s primary tool for rapid, large-scale trade pressure.

The administration quickly pivoted to a different legal authority, invoking Section 122 of the Trade Act of 1974 to impose a temporary 10% global surcharge on imports. But this surcharge has a hard 150-day limit built into the law, scheduling it to expire on July 24, 2026. With its main tariff weapon gone and a deadline approaching, Washington turned its attention to the USMCA Joint Review as the primary arena for extracting concessions.

The Fight Over Cars

The automotive sector sits at the centre of the current negotiations, and understanding why requires a brief explanation of how the rules work.

Under the USMCA, a vehicle qualifies for duty-free treatment only if it meets a set of regional content thresholds. At least 75% of a vehicle’s value must originate within North America. 70% of the steel and aluminium used must come from North American sources. A certain share of the vehicle’s value must be produced in facilities that pay workers an average of at least $16 per hour.

These are strict rules. The previous agreement, NAFTA, only required 62.5% regional content. When the USMCA was negotiated in 2018 and 2019, the Trump administration’s first term pushed for these tighter thresholds specifically to encourage more manufacturing to remain in the region.

The practical result has been unexpected. Because the standard US tariff on imported passenger vehicles from anywhere in the world is only 2.5%, many manufacturers have simply decided that it is cheaper to pay the tariff, and ignore the USMCA rules than to reorganise their complex global supply chains to meet the thresholds.

Between 2020 and 2025, non-compliance rates for vehicles imported into the United States quintupled. Rather than pulling manufacturing back into North America, the rules pushed some producers out of the preferential system altogether.

The labour requirement has also produced mixed results. The rule was designed to raise wages for Mexican automotive workers by requiring that a percentage of a vehicle’s value come from facilities paying at least $16 an hour. In 2024, the average Mexican automotive worker earned $5.66 per hour, compared to $30.86 in the United States. Manufacturers have mostly met the labour threshold by counting their American and Canadian operations, where wages are already high, rather than raising pay in Mexico.

Now the Trump administration is pushing for something more radical. They want a US-specific minimum content rule. This would require that a defined share of the value of every vehicle made in Mexico come specifically from the United States, not just from North America in general.

The logic is that this would force manufacturers to relocate high-value assembly and component work from Mexico to American factories. For Mexico, this is a fundamental challenge to the deal’s structure. For Canada, it is a sign of where Washington’s priorities lie.

Canada on the Outside

Canada has been excluded from the opening rounds of negotiations entirely. The current schedule runs bilateral US-Mexico talks through late July 2026 without Ottawa at the table.

This exclusion comes at an awkward moment for Canada’s new government. Justin Trudeau resigned in early 2025, and Mark Carney became Prime Minister in March of that year. Carney is a former central banker, respected internationally for his economic expertise. His government won a majority in April 2026, giving him a stronger political base. But seven months into formal trade tensions with the United States, Canada’s trade minister has managed only a single day of in-person talks with the US Trade Representative.

Washington’s demands of Canada go beyond the core trade agreement. The administration has insisted that Canada scrap its ‘Online Streaming Act’, a law that requires streaming platforms like Netflix and Disney+ to contribute a percentage of their Canadian revenue to funding domestic Canadian content.

US negotiators argue this unfairly targets American companies. Washington also wants changes to Canada’s supply management system, which uses quotas and price controls to support the domestic dairy industry, and the removal of provincial bans on American alcohol imports.

Canada abolished its 3% digital services tax in mid-2025 as a goodwill gesture. But Carney’s government has made clear it will not accept humiliating terms to preserve the deal.

Speaking directly to an American audience at the Economic Club of New York on May 28, Carney called for a re-imagination of continental trade, stating: “There should be a ‘true partnership’ that re-imagines cooperation in specific sectors challenged by global competition.”

Furthermore, upon launching his government’s Advisory Committee on Canada-US Economic Relations to tackle the crisis, his office reinforced this stance: “Canada is approaching its economic relationship with the United States with focus, discipline, and unity… Our goal is a strong economic partnership with the United States that creates greater certainty, security, and prosperity for all.”

Carney has simultaneously been pushing a domestic agenda centred on reducing Canada’s extreme dependence on the US market, advocating economic diversification into Asia and Europe. The problem is that more than three-quarters of Canada’s total goods exports go to the United States. That dependence does not disappear because a government decides to reduce it.

Mexico’s Careful Balancing Act

Mexico is in a different position. President Claudia Sheinbaum came to power in 2024 with a mandate to manage the country’s complex relationship with Washington carefully. Her approach has been to offer security cooperation in exchange for trade goodwill.

When the Trump administration threatened tariffs in early 2025, Mexico deployed more than 10,000 National Guard troops to its borders, cracked down on fentanyl labs, and extradited prominent cartel figures to the United States, including Rafael Caro Quintero, one of the founders of the Sinaloa Cartel. The message was that Mexico could deliver results that Washington wanted on the security front, and those results were worth more than a trade war.

On the trade side, Sheinbaum sought early on to anchor the coming milestone within the strict boundaries of the original text. In a press conference, she clarified her country’s legal position: “A ‘review’ of the USMCA free trade pact will take place next year rather than a ‘renegotiation’… The agreement says that.”

Following up on US political pressure later in the cycle, she maintained a pragmatic front, stating plainly: “I do not believe the US will withdraw from USMCA.”

Mexico has moved to align its own tariffs with Washington’s concerns about China. In December 2025, Mexico raised tariffs by up to 50% on goods from countries with which it does not have a free trade agreement, a measure primarily aimed at Chinese manufacturing imports. Mexico also launched investigations into hundreds of domestic firms that were importing Chinese steel through special programmes and re-exporting it to the United States, effectively using Mexico as a conduit to avoid American tariffs.

ALSO READ | Trade wars push Mexico toward Saudi Arabia

But the China problem is not easily resolved, and the reason becomes clear when you look at what some major US companies are actually doing. General Motors sold roughly 198,000 vehicles in Mexico in 2025. Of those, 64.1% were manufactured in China.

Only 11.3% were made in Mexico itself. Only 7.8% came from the United States. In other words, the American company most associated with North American manufacturing was selling vehicles in the region’s second-largest economy that were almost entirely made in China.

This is not an aberration. It reflects 20 years of decisions by American multinationals to integrate Chinese manufacturing into their global operations. Any aggressive push to decouple from Chinese supply chains does not just inconvenience Chinese companies. It disrupts the business models of General Motors, Ford, and dozens of other US corporations. That is the bind that Washington is navigating, and it makes the demand for complete decoupling considerably more complicated than the political rhetoric suggests.

Four Possible Outcomes

As the July deadline approaches, analysts see four realistic scenarios for what happens next.

The most likely outcome is what might be called the painful extension. The three countries fail to meet the July deadline, but eventually, sometime in late 2026 or early 2027, reach a new deal. Mexico and Canada accept stricter automotive content rules, tougher labour standards, and tighter restrictions on Chinese goods moving through their territory into the American market.

In exchange, Washington agrees to extend the agreement for 16 years and provides some relief on the tariffs that remain in place. Nobody is happy with the result, but the integrated economy survives largely intact.

The second scenario is – serial annual reviews. If the three countries cannot agree by July, the core mechanism laid out in Chapter 34 of the deal dictates the framework. According to Article 34.7 of the USMCA text:

“This Agreement shall terminate 16 years after the date of its entry into force, unless each Party confirms it wishes to continue this Agreement for a new 16-year term… If, as part of the joint review, one or more Parties do not confirm their desire to extend, the FTC [Free Trade Commission] shall conduct joint reviews annually thereafter…”

The deal stays technically in force under this rolling loop, but every year brings another round of negotiations and another period of uncertainty. For companies trying to decide whether to build a factory or sign a long-term supplier contract in North America, that uncertainty is costly. Investment slows. Supply chains gradually diversify away from the region.

The third scenario is a split into bilateral agreements. A US-Mexico deal and a separate US-Canada deal. This would preserve some market access for both countries but would fracture the trilateral supply chains that have made North American manufacturing competitive. Canada and Mexico would lose the leverage that comes from negotiating together, and each would be more exposed to American pressure individually.

The fourth scenario is withdrawal. Any country can leave the USMCA with six months’ notice. The Trump administration has repeatedly used the threat of withdrawal as a negotiating tactic. The risk is that the threat becomes reality, either by design or by miscalculation.

If the United States were to actually withdraw, goods from Canada and Mexico would lose their tariff-exempt status overnight, and the integrated manufacturing networks of three decades would face an immediate, severe shock.

Why It Matters Beyond North America

The agreement has functioned as a model for how wealthy economies can integrate production across borders while managing political sensitivities around jobs and wages. If that model breaks down, it signals to the rest of the world that no regional trade arrangement is secure when one large partner decides to renegotiate the terms by force.

For businesses operating across North America, the immediate concern is the certainty about the rules that determine where factories get built, where suppliers are contracted, and how supply chains are designed. The longer the uncertainty continues, the more those decisions get deferred or redirected elsewhere.

The livelihoods of millions of people depend on integrated industries that exist because the trade framework made them possible. Automotive plants, logistics networks, agricultural supply chains, technology manufacturing. All of it was built around the assumption that the rules would remain stable.

What happens in Mexico City and Washington over the next several months will determine whether that assumption remains valid.

The post NAFTA: North America’s Trade Glue Is In Turmoil appeared first on International Finance.

“However, the drop was sharper when compared with March 2025, with investment in residential real estate construction dropping 2.2%, while the non-residential sector saw a modest 0.6% increase,” Statistics Canada said.

“In the residential sector, investment in construction dropped to USD 15.5 billion in March, decreasing by USD 345.4 million. While multi-unit housing construction saw a 2.3% decline, single-family homes were not untouched by the downturn, seeing investment decline by 2.1% in March,” the national statistical agency noted further.

Investment in multi-unit construction, on the other hand, was down USD 195.5 million to USD 8.4 billion in March, marking the third consecutive monthly decrease. Investment in single-family home construction reduced USD 149.9 million to USD 7.2 billion.

“Ontario led the declines across the board in residential construction, with investment in multi-unit properties in the province dropping by USD 152.2 million, significantly higher than the province with the next highest drop – Alberta, with a USD 59 million decline,” Statistics Canada remarked.

Ontario also led the decrease in single-family home construction, with investment declining by USD 119.5 million.

The report from Statistics Canada also coincides with the Canada Mortgage and Housing Corporation’s (CHMC) “Housing Market Outlook for 2026”, where the agency said new home construction in the North American country will continue to decline until 2028, citing factors like high costs for developers, weaker demand and more unsold homes.

“In 2025, 259,000 homes began construction across Canada. That number is projected to fall to 247,000 this year, 223,000 in 2027 and 216,000 in 2028. Condominium starts will be especially weak,” CMHC said.

Canada’s condo (privately owned individual unit within a larger residential complex or building) market downturn has entered its fifth year, recent data from real estate research firm Urbanation shows.

“In a typical year, based on the 10-year average, there would be 4,046 condos sold in the Greater Toronto Hamilton Area (GTHA) in the first three months of the year. Between January and March of 2026, that number was 246,” the company noted.

The post Canada’s housing sector undergoing declining investment, says report appeared first on International Finance.

The strategy, named CI Morningstar International Value Index ETF (VXM), uses a factor-based approach to invest in undervalued companies in developed markets outside the United States and Canada.

“The ETF has a strong track record, ranking number one out of all mutual funds and ETFs in the Morningstar International Equity Category based on total returns over the one, five and 10-year periods ending February 28, 2026. The ETF is offered in Canadian dollar Hedged Common Units and Unhedged Common Units,” CI GAM said.

The ETF is currently available in formats like a mutual fund (CI Morningstar International Value Hedged Index Fund, which invests in Hedged Common Units of the ETF and is available in mutual fund Series A, F, I and P units) and ETF series (Unhedged USD Common Units, which have started trading on the Toronto Stock Exchange).

“Market developments over the past 15 months have underscored the importance of diversifying investor portfolios beyond the United States and Canada. CI Morningstar International Value Index ETF is a compelling choice for investors seeking robust international content for their portfolios due to its well-constructed, multi-factor approach and exceptional long-term outperformance. The ETF’s value orientation also makes it a solid complement to growth-oriented US portfolios,” said Jennifer Sinopoli, Executive Vice-President and Head of Distribution for CI GAM.

“By providing expanded access to this proven strategy, we’re giving Canadian investors more options to build resilient portfolios,” the official added.

“The VXM strategy focuses on undervalued international companies by providing diversification across regions and investment styles. A value-based international portfolio provides an excellent diversifier for growth-oriented North American large-caps. It further capitalises on current attractive valuations of select companies in international markets,” CI GAM noted.

The VXM strategy also uses a systematic factor-based approach that screens for traditional value metrics while avoiding value traps (firms with weakening fundamentals), apart from providing a portfolio well diversified by country, sector and market cap, as it includes small and medium-sized companies, along with large caps.

The post CI GAM expands customer access to international equity strategy appeared first on International Finance.

Bank of Montreal, the third-largest Canadian bank by market value, said in October that it would sell 138 branches to First Citizens Bank, apart from reinvesting in markets with stronger client engagement and longer-term growth prospects.

Bank of Montreal’s latest move comes amid some of the biggest American banking players investing in building branches in affluent areas to attract more clients, earn consumer trust and provide higher-value services such as mortgage services and wealth management. In 2023, Bank of Montreal bought BNP Paribas’ US unit, Bank of the West, for USD 16.3 billion. This was the BMO’s largest deal to date, giving it access to nearly two million customers, about 500 retail branches, and commercial and wealth offices in the Midwest and Western United States.

“The bank plans to open three new financial centres in Greater Los Angeles in 2026, two in the Bay Area and two in San Diego, which will create hundreds of jobs and expand access to in-person and advice-led banking,” the lender said in its media note.

Bank of Montreal has over 220 financial centres in California, and the planned expansions would add more than 50% to its footprint in the American state. Shares of BMO have returned a little over 7% so far in 2026, ahead of its larger peer, Royal Bank of Canada.

Meanwhile, BMO is navigating a more volatile North American rate environment while doubling down on expansion and capital discipline in the United States. For global investors, BMO offers a diversified North American banking franchise with exposure to cross-border trade, wealth management, and capital markets, but faces risks like cyclical credit and regulations.

The post Bank of Montreal to open around 150 financial centres in United States appeared first on International Finance.

The narrative is a deliberate distortion designed to evade moral responsibility and commit grave political wrongdoing. Canada, a prosperous nation, is abandoning its most vulnerable citizens, leading to soaring poverty and starving children. This catastrophe is wrongly labelled a temporary economic headwind, not a policy failure. We must immediately reject this sanitised view.

The evidence is overwhelming and utterly damning. Canada’s official poverty rate, measured by the Market Basket Measure (MBM), is expected to have climbed significantly to 10.2% in 2023, reversing years of hard-won progress and signalling a structural breaking point.

This distressing climb follows a staggering 21.8% jump in the poverty rate just from 2021 to 2022, confirming that the economic floor supporting low-income Canadians is fragile, inadequate, and wholly dependent on temporary governmental goodwill, which is now receding.

Look around and watch the financial anxiety spread like a contagion through every province. One in six Canadian households now experiences food insecurity, representing a crushing 15.6% prevalence in 2022.

This rate of insecurity closely tracks peak inflation and the soaring costs of necessities like shelter and transportation, confirming the economic origins of hunger. When Food Banks Canada assesses the country’s performance, it returns a dismal D grade for meeting food security needs and a failing grade for food insecurity overall. This is not an evaluation of charitable success, but an indictment of a state that failed its most basic duty, which is to ensure its citizens do not go hungry.

The moral obscenity is most acute when we count the children. 2.5 million children in the ten provinces are now growing up in food-insecure households in 2024, representing a third of all Canadian children, condemned to the stress and lifelong stigma of going without because their government prioritised fiscal inertia over feeding its young.

The rapid collapse in basic material well-being, evidenced by the increase from 2.1 million children in 2023, shows economic growth is failing to benefit everyone, resulting in stark, widening inequality.

These failures are most clearly demonstrated when examining the key indicators of structural neglect, showing a distinct reversal of progress immediately following the temporary relief offered during the pandemic years.

How Ottawa hurt workers

The structural origins of this current catastrophe can be traced back to the deliberate economic restructuring that began decades ago, a political project rooted in the neoliberal dogma that crushed the manufacturing sector and enshrined labour precarity as the new normal, ensuring that wages would stagnate while the cost of living exploded.

We see this criminal neglect in the data on wages. Overall median household income increased by a paltry 14.6% over 41 years between 1976 and 2017 in constant dollars. This near-stagnation of pay, spanning generations, confirms that the rewards of national productivity have been systematically diverted away from the workers who generate them.

Income inequality has persisted at or near record highs over the past decade. It has been engineered through policy choices that systematically weakened collective bargaining power.

When policy analysts discuss precarious employment, they are talking about a quantifiable lack of security, low wages, income volatility, and little opportunity for career advancement. This is the changing nature of work dictated by economic policy, a deliberate erosion of worker protections.

Worse still, the Canadian state has actively constructed a system of legal exploitation through its Temporary Foreign Worker Programme, a scheme that privileges corporate access to cheap labour over the human rights of migrants.

The policy shift favouring temporary migration over permanent residency has created a vast, vulnerable underclass of workers who are denied access to federally funded settlement services and are often bound to single employers, subjecting them to abuse and limiting their mobility. The absence of systematic monitoring to ensure their rights are protected further cements their precarious status, making them highly vulnerable to mistreatment.

This structure is marketed as necessary for economic efficiency, but it functions as a wage suppressor, ensuring that low-wage firms retain talent without having to offer competitive wages or working conditions.

The expansion of the TFWP, as experts have shown, actively contributes to maintaining wider discrepancies in regional unemployment rates than would otherwise exist, preventing the structural adjustments necessary to raise wages for all low-income Canadians.

The system is creating a two-tier economy, which is precarious by design and ensuring that those who harvest our food and staff our services remain perpetually marginal.

The long-term wage stagnation, when directly contrasted with the explosive growth in housing prices, a phenomenon where home prices in major markets rose by as much as 460% over three decades, fundamentally proves that political decisions prioritised capital accumulation and speculative wealth over worker compensation, a moral betrayal that doomed millions to financial strain even while holding down jobs.

How US Power crippled Canada

Being a neighbour to the world’s richest country should be a blessing, at least on paper. But Canadians have, until very recently, held deep fear of being a satellite, or vassal state to the great American hegemon. The anxiety was so terrible that in 1957, the “Gordon Commission” rang the alarm bells about the US economic takeover. By the early 1960s, the US interests controlled roughly 60% of Canada’s manufacturing and 70% of its oil and gas.

It’s important to note that just 15 years prior, Great Britain was Canada’s number one customer. World War II had wrecked Britain, and the English population could no longer buy Canadian goods. The Arctic giant had come out of the Great War without any casualties to citizens or factories, but was losing to the economic imperialism of its exceptional neighbour. In 1955, Canada had the highest standard of living in the world. The US slowly and steadily captured the Canadian market. And Canadians embraced protectionism as a policy, much like how the US under Trump operates today. American companies had to manufacture in Canada if they had to sell in Canada. This made American goods in Canada slightly more expensive than in America, but it also meant Canadians had ownership, jobs and a robust economy.

All this came to an end in the late 60s when the “Clarence Decatur Howe” Strategy came into being under the Canadian Minister of Trade (C.D. Howe). He aggressively courted American investment. His view was, “Who cares if they own it, as long as the jobs are here?” This policy built modern Canada, but laid the foundation for the dependency that exists today.

In 1965, Canada took the first step towards the forfeiture of its economic servitude. A move that would enrich Canada temporarily at the expense of the future of working-class Canadians and children. The Auto Pact (1965) destroyed Canada’s automobile industry. Many domestic industries went bust and America brought its branch plants into Canada. Ottawa became an assembly line with no access to real R&D or innovation. Yet Canadians were happy to have jobs.

In 1989, a comprehensive free trade agreement was signed that included all sectors of the economy, not just automobiles. This led to factories shutting down and relocating to the United States, and later to Mexico. As a result, there was widespread unemployment, and poverty levels rose significantly. Social spending was also reduced, causing the standard of living to decline. This marked the beginning of the decline of the Canadian dream, sacrificed for the benefit of American businesses and facilitated by Canadian politicians working on behalf of American lobbyists.

Today, an astonishing 77% of Canada’s exports are sent to the United States. This dependency gives the US considerable leverage; if America alters its trade policies—such as imposing 10% tariffs on aluminium or enforcing “Buy American” provisions—the Canadian economy feels the impact. The Canadian people took a bad deal, and to top it all off, the Trudeau government started a massive migration campaign to protect the housing bubble. But Canada’s poor and working class are the ones who suffer at every turn. From a nation with the highest living standards to economic indenture, Canada has come a long way and might want to rethink its policies and allies.

The decades-long policy crime

Of all the policy decisions in Canadian history, none more clearly embodies political malice than the federal government’s calculated withdrawal from social housing in the mid-1990s. More than any other decision, it entrenched the structural divide between those who own property and those condemned to struggle without it.

The evidence is surgical in its precision. The federal government froze social housing investments in 1993, ended its co-operative housing programme in its 1992 budget, and by 1995, it ceased funding new affordable housing development entirely, ending a 50-year commitment to shelter the most vulnerable. This act of institutional cruelty was immediately followed by the devolution of existing social housing administration to provincial and municipal governments in 1999.

This devolution coincided with the replacement of the “Canada Assistance Plan”, which had provided open-ended, 50-50 cost-sharing for social programmes, with the fixed, inadequate block grants of the Canada Health and Social Transfer. This manoeuvre effectively starved the social housing sector of resources, ensuring that between 1995 and 2002 almost no new non-profit units were created, a historical failure that created the decades-long supply void and the affordability crisis we now face.

The gap created by the government’s withdrawal was eagerly filled by financial speculators, transforming housing from a fundamental human right into the primary means of wealth generation for the middle and upper classes. Policies that supported the securitisation of mortgages fuelled the financialization of the housing sector, completely disconnecting increases in housing prices from economic fundamentals and income levels.

The result is that in major urban centres like the Greater Toronto Area, home prices jumped over 436% between 1994 and 2024, while household incomes climbed only about 34.6% over the same period.

The tragic consequence of this policy crime is visible on every street corner across the country. Over 10% of Canadian households, equating to 1.5 million individuals, are currently in ‘core housing need,’ and Canada is experiencing the proliferation of unstructured encampments in large, medium, and smaller cities.

When vulnerable people are discharged from systems like hospitals, corrections facilities, or mental health facilities and find no exit housing, they are forced directly into homelessness, a system failure directly attributable to the decades-old policy of gutting affordable housing programmes.

This lack of non-profit and cooperative housing supply is a systemic factor, compounded by high inflation and rising interest rates, demonstrating that the market cannot be relied upon to solve the crisis created by the state’s retreat.

And let us not forget the green blunder. As per policy think tank Fraser Institute, the previous Justin Trudeau government introduced a series of tax measures, spending initiatives, and regulations to actively constrain the traditional energy sector while promoting what the administration termed the “green” economy. However, the results were not encouraging.

Ottawa introduced regulations to make it harder to build traditional energy projects, banned tankers carrying Canadian oil from the northwest coast of British Columbia, proposed an emissions cap on the oil and gas sector, cancelled pipeline developments, mandated almost all new vehicles sold in Canada to be zero-emission by 2035, imposed new homebuilding regulations for energy efficiency, changed fuel standards, and the list goes on and on.

“Despite the mountain of federal spending and regulations, which were augmented by additional spending and regulations by various provincial governments, the Canadian economy has not been transformed over the last decade, but we have suffered marked economic costs. Consider the share of the total economy in 2014 linked with the ‘green sector,’ a term used by Statistics Canada in its measurement of economic output, was 3.1%. In 2023, the green economy represented 3.6% of the Canadian economy, not even a full one-percentage point increase despite the spending and regulating,” the Fraser Institute remarked.

Ottawa’s initiatives failed to deliver the promised green jobs. From 2014 to 2023, only 68,000 jobs were created in the entire green sector, which now represents less than 2% of total employment. Canada’s economic performance cratered in line with this new approach to economic growth. Rather than delivering the promised prosperity, it delivered economic stagnation.

According to the Canadian living standards (measured by per-person GDP), lifestyle prosperity was recorded on the lower side as of Q2 2025 compared to six years ago. In other words, Canadians are poorer today than they were six years ago. In contrast, the United States’ per-person GDP grew by 11.0% during the same period.

Cruel math of the safety net

The sheer, calculated cruelty of Canada’s current social safety net is evident in its outcomes. The system is fragmented, difficult to access, inefficient, outdated, inadequate, and is a bureaucratic maze meant to traumatise and deter those who seek aid.

The defining failure of this system is its persistence in keeping people in poverty. An annual report shows that 98% of household types receiving social assistance in Canada are below the country’s Official Poverty Line.

Furthermore, 73% of these households are trapped in deep poverty, defined as having less than 75% of the poverty threshold. This is clear evidence that social assistance is quite literally designed to be a poverty trap, normalising destitution rather than facilitating escape.

This calculated inadequacy is exacerbated by rapid economic erosion, particularly due to high inflation. Between 2023 and 2024, more than a third of welfare recipients, 36% of tracked households, saw their total incomes increase at a rate below inflation, meaning that in real dollars, they are becoming poorer every year, actively losing ground against the rising cost of living.

This real income decline occurred despite some provinces attempting to offer one-time cost-of-living supports, demonstrating that the underlying provincial social assistance benefit rates are simply too low and frequently stagnant. When provinces like Ontario fail to adjust basic social assistance benefits, it is a conscious decision to normalise destitution and push vulnerable citizens deeper into the deprivation abyss.

This systemic cruelty falls hardest on specific groups. The poverty rate among people with disabilities is drastically high, solely because the benefits provided are fundamentally detached from the actual, significantly higher costs of living with a disability. The increasing reliance on the “Ontario Disability Support Programme,” as shown in Ontario data, reflects the reality that people with disabilities are being failed by both the labour market and an inadequate social net, leading to their over-representation in the poverty statistics.

For new parents, the mandated drop in income resulting from “Employment Insurance” benefits during maternity and parental leave creates significant financial stress precisely when costs are highest, a structural contradiction that pushes middle-class families toward financial instability.

Furthermore, Canada remains the only G7 nation without a comprehensive national school food programme, ignoring the overwhelming evidence that such programmes are highly successful drivers of improved health, education, and economic growth internationally. International experience, notably programmes like the United States’ “National School Lunch Programme,” shows that school meals yield a massive return on investment. Yet Canadian policymakers prioritise corporate tax breaks and speculative wealth over ensuring that millions of children eat nutritious food. This is a policy of moral bankruptcy.

And what of the medical costs? The financial burden of necessary prescription drugs is a known structural driver of poverty, yet Canada maintains significant gaps in coverage, refusing to implement a national pharmacare plan that works like Medicare. This deliberate policy decision forces low-income families and workers to choose between medicine and food, increasing health disparities and driving up overall healthcare costs unnecessarily. The political resistance is rooted in fears over escalating costs, yet a national plan would save Canadian families money while expanding access.

Indictment of a nation

From the destruction of stable manufacturing jobs under free trade to the calculated withdrawal of social housing funding in the 1990s, from the institutionalisation of precarious migrant labour to the maintenance of a welfare system designed to keep people in deep poverty, every data point confirms this reality. The combination of various crises has increased the desperation of the population, resulting from these compounded policy failures.

The evidence presented by national bodies and academic experts is indisputable. The “Market Basket Measure” tells us that the working poor cannot afford a modest, basic standard of living. Statistics Canada confirms that food insecurity tracks peak inflation, and human rights advocates warn that the refusal to make the right to food justiciable is the ultimate mechanism of governmental evasion.

The “Poverty Reduction Strategy”, launched in 2018, while ambitious in its targets, has stalled dramatically, showing that good intentions without enforceable rights and structural economic correction are merely political rhetoric.

Canada must choose immediately between two futures, one where we continue this shameful path of structural neglect, managing poverty through ineffective charity and political platitudes, and one where we implement a rights-based, income-guaranteed system that recognises the dignity and inherent worth of every person.

The post The collapse of Canada’s promise appeared first on International Finance.