3 hours Ago By Gigi Suhanic
The is taking it harder on the chin than the even though the two countries are both squarely in ‘s crosshairs. The loonie is down 0.5 per cent against its U.
S. counterpart since Jan. 20, the day Trump was inaugurated, versus a gain of 3.
5 per cent for Mexico’s currency. In a basket of 16 major currencies, including the Japanese yen, the euro and the pound, the loonie is wallowing in second-last place in total returns, bracketed by the Taiwanese dollar and South Korean won, while the peso is comfortably No. 8.
Why has the peso been given an easier ride since Trump’s ascendance? Currency analysts cite a few reasons. “We think the Canadian economy is more exposed to tariff extortion,” Nick Rees, head of macro research of Monex Europe Ltd., said in an email.
“Mexico is better able to offer concessions to the U.S., and that limits some of the downside that markets are willing to price.
For Canada, this is more difficult, leaving the loonie relatively more vulnerable. If anything, we see this getting worse given the more hardline stance seemingly being taken by Carney.” was elected Sunday as the new leader of the and he will be sworn in as prime minister on Friday, taking over from .
In his short time since being elected Liberal leader, Carney has come out swinging, saying the retaliatory tariffs Canada has enacted against Trump’s first levies will stay in place until the country gets “respect” from the U.S. president.
By contrast, Mexico’s President has kept her powder dry since the tariff crisis erupted in early February, insisting she can negotiate a good deal on tariffs. On Thursday, U.S.
Commerce Secretary for their measured responses to tariffs, while singling out Canada over its retaliation, according to a report from Bloomberg. Recent reprieves on tariffs have been granted first to Mexico, with Canada bringing up the rear. “The divergence in the responses from and Canada has not resulted so far in differentiated treatment for their exports, but there is a clear distinction in the way negotiations have been taking place, with Mexico having had a smoother communication channel with the U.
S. administration,” analysts at JPMorgan Chase & Co. said in a note.
Similar to Rees, they also see room for Mexico to obtain some tariff breaks. Details on sectoral and reciprocal tariffs are expected on April 2, the end of Trump’s second extension on his across-the-board 25 per cent tariffs on exports to the U.S.
“For Mexico, we see space for carve-outs in the auto sector and minimal reciprocal tariffs if VAT (value-added tax) is excluded from the scheme,” the analysts said. Mexico has a 16 per cent VAT on goods and services, but it also has a lower eight per cent rate (at its southern and northern border regions) and several categories of goods and services are also exempt. They think Mexico will be able to appease the U.
S. by agreeing to limit the amount of goods it imports from China, especially in autos and electronics, and closing loopholes on items passing through the country to another destination. JPMorgan is calling for “bullish scenarios for Mexico amid ongoing negotiations with the U.
S.” , vice-president and head of capital markets economics at the Bank of Nova Scotia, points out the peso underwent a severe revaluation last year due to domestic issues, and the currency is down 17 per cent since last April compared with six per cent for the Canadian dollar. “So, Mexico’s currency pain was more front-loaded for different reasons,” he said in an email.
In the here and now, however, “ As the Financial Post’s tax expert found out himself, tax slips can cause problems for taxpayers who receive more than one slip from the same issuer. Are they duplicate slips, separate slips or amending slips? A recent tax case decided earlier this month highlights one person’s trouble with an amended slip and a “stupid mistake” by the Canada Revenue Agency. .
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