Krishen Rangasamy, analyst at National Bank Financial, suggests that they continue to expect a Q2 rebound for Canadian exporters after an ugly first quarter as the purge in U.S. imports, which hurt Canadian exporters in Q1, is more likely than not to be reversed.
“According to the IMF, Canada stands to benefit from trade diversion effects in the aftermath of the escalating trade war between the U.S. and China.”
“A 1% reciprocal tariff increase between those two economies makes Canadian goods relatively more competitive, with the resulting increase in exports lifting Canada’s real value added by about 0.8%. That’s not to say one should cheer the deteriorating relationship between those two superpowers.”
“There’s a limit to trade diversion and comes a point when global supply chains and world trade volumes, and by extension global GDP growth, will suffer from earlier tariff increases. The resulting hit to commodity prices and negative spillovers on the U.S. economy, won’t be good for Canada. In other words, the U.S.-China trade war can only be beneficial to Canada if it doesn’t escalate beyond a certain point.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.