A survey by Export Development Canada released this week said that over one-third of Canadian exporters report a negative impact from the US Section 232 steel and aluminum tariffs. Among companies affected by the tariffs, 19 percent have reportedly raised prices and 18 percent have found alternate markets and suppliers.
The report said that although the recently-signed USMCA trade deal has eased uncertainty, exporters’ confidence has “eroded amid broader global trade tensions such as those between the US and China.”
The agency’s semi-annual survey showed that overall trade confidence slipped to 73.8 percent, a decline from 76.5 percent six months ago. Canada, the US and Mexico finally reached a deal to replace NAFTA in September, but US steel and aluminum tariffs against imports from Canada and Mexico remain in place.
The agency conducted a telephone survey of 1,000 small-, medium- and large-sized Canadian exporters from Oct. 23 to Nov. 13, finding that the USMCA signing ceremony had a “notable impact” on their investment plans. Approximately 41 percent of companies surveyed said they have increased or are considering increasing investment, over twice as many firms from six months ago.
However, 34 percent of the exporters surveyed said they were negatively impacted by steel and aluminum tariffs. About 14 percent of Canadian exporters cited foreign tariffs or trade barriers as the top challenge they are facing.
The agency’s confidence measure in world economic conditions declined the most out of five categories, and one-third of the companies surveyed said increased protectionism was affecting their global strategy.