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--Canada Export Bank Says Confidence At Record Low
By Greg Quinn
OTTAWA (MNI) - U.S. protectionism such as recent "buy local" policies are
adding to Canada's plunge in exporter confidence beyond the economic slump
triggered by Covid-19, the deputy chief economist at the country's trade bank
Firms were becoming alarmed about renewed U.S. tariffs even before threats
in the last week of aluminum levies, Stephen Tapp of Export Development Canada
said. America is also cutting back on imported medical equipment and food, he
"People are more concerned about producing nationally, producing locally,
and having domestic supplies ready," Tapp said. "More customers, particularly in
the U.S., are dealing out a buy local push."
Exporter confidence plunged to a record low in EDC's semi-annual survey
published Thursday, falling to 56 from 69.3. There was a "radical jump" in firms
hurt by protectionism to 39%, Tapp said, citing 823 responses gathered last
Worries about trade restrictions come days before the new USMCA takes
effect, and in a year where the Phase One U.S.-China deal was supposed to defuse
trade tensions. Instead, Canadian companies face another setback as China shifts
orders to American firms to meet the required increase of U.S. farm purchases.
"That's going to hit things like soybeans, lumber, seafood, pork, and those are
some of the things we export a lot of to China," Tapp said.
Canada and the U.S. were the world's largest trade partners before China's
rise to the world's second-largest economy. Lost exports and U.S. oil
independence are big reasons why Canada's economic rebound from Covid will
likely take longer, including a near-zero rate policy from the central bank.
The EDC survey dates back to 1999 and one reason the index has hit new lows
is the breadth of the shutdown, hitting services as well as goods, Tapp said.
The Trade Confidence Index showed declines across all industries and regions of
Pessimism also ruled questions about the economic recovery. Almost
two-thirds of respondents see their sales being damaged at least into next year,
and 67% the see global recession lasting for more than a year.
Some 44% see a W-shaped recovery, compared with 32% calling for a u-shaped
recovery and only 5% hoping for a V-shape.
"The supply side may come back but the return of demand may take some
time," Tapp said.
--MNI Ottawa Bureau; +1 613-314-9647; email: firstname.lastname@example.org