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Feb 13
|
|
$71.77
$71.39
-0.5%
|
AVOID
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Laura Davison
Washington Bureau Chief
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"Trump also... has been privately weighing this week whether to pull out of the USMCA North American trade pact." Even the rumor of a USMCA withdrawal is toxic for Canadian and Mexican assets, as their economies are heavily integrated with the US. Uncertainty regarding the treaty undermines the investment case for Canadian equities and currency. AVOID Canadian equities and currency exposure until the USMCA threat resolves. Trump reaffirms commitment to USMCA, causing a relief rally. |
Bloomberg Markets
Taiwan, US Sign Trade Pact
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Feb 12
|
|
$71.79
$71.39
-0.6%
|
WATCH
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Peter Navarro
Senior Counsel on Trade and Manufacturing (Trump Adviser)
|
Navarro states USMCA has "significant flaws" and will be "re-evaluated in July." He accuses Mexico and Canada of being "staging areas" for Chinese goods to evade US tariffs. This rhetoric signals imminent trade friction. If tariffs are slapped on Canadian/Mexican imports to close "loopholes," it hurts the Canadian economy (EWC/FXC) and US automakers with integrated cross-border supply chains (GM). WATCH/AVOID assets heavily exposed to cross-border North American trade until the July re-evaluation clarifies the tariff regime. The administration may bluff for leverage without actually imposing damaging tariffs. |
Bloomberg Markets
Trump Adviser Navarro on the Attack Against D...
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Feb 12
|
|
$71.79
$71.39
-0.6%
|
SHORT
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Laura Davison
Washington Bureau Chief
|
Trump is "very unlikely to sign this legislation" and is reportedly thinking about "pulling out of this deal [USMCA] entirely." While the House vote suggests relief, the reality is a likely veto and an escalation of trade tensions. The threat of total USMCA withdrawal is an existential economic threat to Canada, which relies heavily on US exports. This uncertainty creates significant downside pressure on Canadian equities (EWC) and the Canadian Dollar (FXC). Short Canadian exposure until the USMCA/Tariff threat is resolved. Trump unexpectedly signs the bill or the Supreme Court strips his tariff authority. |
Bloomberg Markets
US House Votes to End Trump's Canada Tariffs
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Feb 12
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$71.79
$71.39
-0.6%
|
LONG
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Rep. Schneider
Congressman (D-IL), Chair of New Democrat Coalition
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"Vote last night to... oppose the tariffs against Canada... I expect there will be [more such votes]... Tariffs are a tax... not the way to go here." A growing bipartisan coalition in Congress is actively blocking the Executive Branch's tariff threats against key allies like Canada. This legislative check reduces the tail risk of a trade war, bullish for Canadian equities (EWC) and the Canadian Dollar (FXC) which suffer under tariff uncertainty. LONG Canadian assets as political opposition to tariffs solidifies. The President bypasses Congress using emergency powers; tariffs are implemented despite legislative opposition. |
CNBC
Rep. Schneider: Affordability agenda ensures ...
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Feb 11
|
|
$71.98
$71.39
-0.8%
|
SHORT
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Kailey Leinz
Bloomberg Reporter
|
Trump is "privately mulling potentially exiting the USMCA" and has recently threatened "100% tariffs over Canada's pact with China" and "50% tariffs targeted at Canadian aircraft." The Canadian economy is existentially dependent on access to the US market. Even the *threat* of USMCA dissolution or 100% tariffs creates a massive risk premium for Canadian equities (EWC) and the Canadian Dollar (short via FXC). SHORT Canada. The uncertainty regarding the $2 trillion trade relationship is a direct headwind for the TSX and CAD. Trump's threats could be purely negotiating leverage ("posturing") that resolves quickly, causing a relief rally. |
Bloomberg Markets
Trump Privately Weighs Quitting USMCA Trade P...
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