Canada's economy grew 0.3 per cent in June as Trump invoked a 1930 tariff clause
Statistics Canada reported real gross domestic product rose 0.3 per cent in June, with the July advance estimate essentially flat. President Donald Trump imposed a 50 per cent tax on 20 billion dollars of Canadian imports under Section 338 of the 1930 Tariff Act, an authority never before used or litigated. RYAM will shut its Québec site on 15 September, affecting 425 unionised workers.
Economics & Markets··Evening
June growth marks a third straight monthly gain
Statistics Canada reports real gross domestic product grew 0.3 per cent in June, a third straight monthly gain, with 13 of 20 sectors contributing. The agency's advance estimate for July shows the economy essentially flat. In June wholesale trade rose 1.7 per cent, retail trade 1.4 per cent and manufacturing 0.6 per cent, while mining and extraction contracted 0.6 per cent. On the industry measure second-quarter growth came in at 0.9 per cent, well above the 0.1 per cent of the first quarter, with 17 of 20 sectors expanding. In the July advance estimate, gains in real estate and professional services were offset by declines in retail trade and manufacturing. The agency stressed that its July advance estimate pointed to an essentially flat economy. June marked a third consecutive monthly increase in output. Wholesale and retail trade both contributed to the June gain.[1]
Trump reaches for a 1930 tariff provision
President Donald Trump leaned on Section 338 of the Tariff Act of 1930 a week ago when he put a 50 per cent tax on 20 billion dollars of Canadian imports. The authority has never been used and never been tested in court, and Ottawa answered with dollar-for-dollar retaliation. The administration reached back to the Depression-era statute known as Smoot-Hawley to punish Canada over what it calls discrimination against US dairy, automotive and alcoholic beverage exports. Ryan Majerus, a partner at King and Spalding and a former US trade official, called the law a blank canvas because it has never been litigated. Some lawyers argue later trade legislation has left the 1930 provision obsolete, leaving it unclear whether the duties would survive a challenge. Majerus put it this way: the law is literally a blank canvas because it has never been litigated. The administration said it was punishing Canada over discrimination against US exports.[2]
Tariffs hit a Québec plant
RYAM, which runs the Témiscaming site in Québec, said it will stop production there on 15 September, a decision that affects 425 unionised workers. The company tied the move to US tariffs of up to 50 per cent imposed on 22 August on 27.6 billion dollars of Canadian goods. The company said the decision follows a business environment that has become unsustainable and that continued operations are no longer economically viable. Canada's counter-tariffs take effect on 8 September at rates of 15 per cent, 25 per cent and 50 per cent on the same 27.6 billion dollars of US imports. Mayor Alain Gauthier called the tariffs a nuclear bomb for sectors that depend on the US market. The company cited the magnitude of US tariffs together with long-standing pulp and paper sector pressures on the facility. Gauthier said the tariffs were a nuclear bomb for sectors that depend on the US market.[3]
