The prospect of severe U.S. tariffs on imports from Canada and Mexico is the big issue dominating the week ahead. U.S. President Trump has said 25 per cent tariffs are on track to go into place on Tuesday. These tariffs would apply to all Canadian and Mexican goods, except for energy products from Canada, which are set to be taxed at 10 per cent. As reporters at Bloomberg have indicated, Trump’s brinkmanship puts North America back on the brink of a trade war, which economists say would hurt U.S. growth, worsen inflation and possibly spark recessions in Mexico and Canada. If there’s no last-minute reprieve, March 4 will see taxes ramped up on well over US$1 trillion of imports. Trump’s tariff threats have also rattled financial markets. The U.S. dollar soared on Thursday, when the U.S. President reiterated the tariff vow and timeline. The S&P 500 Index fell 1.6 per cent as investors worried about the impact of trade barriers on the economy.
We’ll get insight this week from one Canadian company on the front lines of the trade issue – Guelph Ontario auto-parts manufacturer Linamar. The company is set to release its latest quarterly earnings report on Wednesday. One industry analyst says Ontario automotive assembly plants could shut down within a week of being hit with a U.S. tariff on their vehicles. Linamar is helped by also providing products for the construction and agriculture sectors, selling to both domestic and international customers.
The U.S. consumer will also be in focus, with earnings reports from shopping giants Best Buy, Target, Kroger and Costco. Analysts and investors will be looking for hints from these companies on the possible impact of import tariffs on the many foreign-made goods they sell in their stores.
The week will wrap up with the all-important monthly jobs reports for both Canada and the U.S.. Canada will be coming off a stronger than expected performance in January, when 76,000 net new jobs were created, and the unemployment rate fell to 6.6 per cent. A similar performance in February would help the loonie, which has slipped back below 70 U.S. cents in the wake of the U.S. trade tariff threats.
Monday, March 3
Calgary home sales - February
Tuesday, March 4
U.S. tariffs on imports from Canada and Mexico expected to take effect
Vancouver home sales - February
Earnings: Advantage Energy, Pet Valu, Baytex Energy, Best Buy, Target, Autozone, Crowdstrike
Wednesday, March 5
Toronto home sales - February
Earnings: Linamar, Aecon Group, South Bow, Tourmaline Oil, Descartes Systems, Badger Infrastructure, Fortuna Mining, Parkland, Vermilion Energy, Campbell’s, Brown-Forman
2:00 p.m. U.S. Federal Reserve Beige Book
Thursday, March 6
Montreal home sales - February
Earnings: Paramount Resources, Canadian Natural Resources, Kroger, Costco, Broadcom, Hewlett Packard Enterprise
Friday, March 7
8:30 a.m. Canada and U.S. Employment Reports (February)
Earnings: Altagas, MDA Space, Algonquin Power
