Canadian economic activity was clearly contracted in the second quarter, due to the fall in heavy exports for customs duties imposed by the president of the United States, Donald Trump.
The GDP of the ninth world economic power fell 1.6% compared to the first quarter, in annualized rhythm, according to data published this Friday, August 29 by Statistics Canada. This is the first decrease in the seven quarters for Canadian GDP. The government agency has also reduced growth in the first 2% quarter first in annualized rhythm against 2.2% announced at the end of May.
Penalized by customs tasks
Property exports show a marked fall due to the taxes of customs tariffs by the United States. This slows the trade among the residents of North America. Exports decreased by 7.5% in the second quarter, after increasing 1.4% in the first quarter. Due to the customs tasks imposed by the United States, international car exports and light trucks fell sharply (-24.7%) in the second quarter. Exports of machines, equipment and industrial pieces (-18.5%) and those of travel services (-11.1%) also decreased the statistical statistical statistic written in its press release.
The drop in activity could increase the possibilities of a fall in interest rates by Banque du Canada in September. The latter has held its rates without changes in 2.75% in its last three meetings.
Canada’s appeasement gesture
In August, Canada announced that it abolished customs duties imposed so far in US products, respecting the conditions of the North American Free Trade Agreement (Aceum), a gesture that meets the exemptions granted at the beginning of the month by Washington on Canadian products. The two countries also continue their discussions to reach an agreement in the coming months.
However, in this complicated context, Andrew Grantham, Cibc Bank analyst notes in the second quarter with the growth of 3.5% of domestic demand. This growth was mainly stimulated by the final expenses of household consumption, which increased 4.5% in the annualized rate and the final expenses of consumption of public administrations, which increased 5.1%, said Statistics Canada.
Source: BFM TV
