Steel tariffs and the devil’s in the details: USMCA
For Print Only Logo
Insights and Market Perspectives

Steel tariffs and the devil’s in the details: USMCA

Author: Portfolio Specialist Group

October 15, 2018

A recap of last week’s top economic news and what’s to come

  • Finance Minister Bill Morneau said last week the government will impose immediate global tariffs and quotas designed to deflect a damaging flood of steel imports into Canadian markets as a result of U.S. levies. The “provisional safeguard” measures on seven steel products — considered emergency actions by the World Trade Organization — will apply to all countries including China, but will provide specific exemptions for the United States, Mexico, and developing countries.
  • New rules in the United States-Mexico-Canada trade agreement place unusual restrictions on Canadian dairy exports that could limit both the growth of the industry and its ability to clear a glut of milk products from domestic markets, experts said last week. The controversial Class 7 pricing system places unexpected restrictions on Canada’s global exports of certain dairy products.

Canadian Housing starts slow, U.S. CPI rises less than expected

  • Canadian housing starts fell by 5.9% in September to 188,683 units, down from 198,843 in August and below analysts estimates of 210,000. The Canada Mortgage and Housing Corp. said that urban starts were down 5.9% to 175,653 units. Meanwhile, starts of urban multiple-unit projects such as condos, apartments and townhouses fell 8.9% to 122,656 units.
  • U.S. consumer prices rose less than expected in September, dampened by a slower increase in the cost of rent and falling energy prices, as underlying inflation pressures appeared to cool slightly. The Consumer Price Index increased 0.1% last month after rising 0.2% in August.

Hurricane Michael’s economic wallop, a dire report on climate change

  • Hurricane Michael, the powerful Category 4 hurricane bearing down on Florida’s Gulf Coast last week, is projected to have caused roughly anywhere between $20 to $30 billion in damage and lost economic productivity.
  • The UN Intergovernmental Panel on Climate Change warned governments around the world that they must take “rapid, far-reaching and unprecedented changes in all aspects of society” to avoid disastrous levels of global warming. The scientific authority said the planet will reach the crucial threshold of 1.5 degrees Celsius above pre-industrial levels by as early as 2030, precipitating the risk of extreme drought, wildfires, floods and food shortages for hundreds of millions of people.

IMF cuts global economic growth forecasts, raises concerns over demand for oil

  • The International Monetary Fund (IMF) slashed its global growth forecasts for 2018 and 2019 by 0.2 percentage points to 3.7%. The Washington D.C.-based institute also raised concerns that demand for oil may slump over the coming months.
  • Meanwhile, the IMF also said ongoing trade tensions could shave 1.6 percentage points off China’s economic growth over the first two years. However, much of that impact is expected to be offset by the Chinese government’s policies to stimulate the economy.


What’s to come

Canada’s CPI numbers, several U.S. data releases including housing

In Canada, a lot of attention will be focused on the release of CPI numbers. Meanwhile, a slew of data will be released in the U.S., including retail sales, housing starts and existing home sales as well as industrial production numbers.


Source: BMO Economics, TD Economics, Reuters, CNBC as of October 12, 2018

Download the Summary


Source: Bloomberg, as of October 12, 2018


About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

For further information, please visit

© 2018 AGF Management Limited. All rights reserved.

More articles like this.

Time to bet on genomics?

Time to bet on genomics?

Advancements in biotechnology, genome sequencing and gene editing have given rise to whole new areas…

Read More
Welcome to Gridlock: Markets sigh with relief

Welcome to Gridlock: Markets sigh with relief

U.S. midterm elections delivered on a much-anticipated outcome: the Democrats wrested control of the House of Representatives, while the GOP tightened its grip on the Senate.

Read More
After the midterms: Who wins, who loses, and gearing up for gridlock

After the midterms: Who wins, who loses, and gearing up for gridlock

Investors love certainty and Tuesday’s U.S. midterm elections delivered on a much-anticipated outcome: Congressional gridlock,…

Read More