The Canadian dollar is starting to feel the effects of long-term uncertainty. It will get worse.
...”Since the start of June, the currency has weakened 2.9%, which would be its steepest monthly decline since October 2024, as Canadian bond yields fell further below U.S. yields.”… {source}
Now, this is where you really need to pay attention to details. Remember, the U.K and EU have a vested interest in protecting Canada from economic collapse.
President Trump doesn’t want immediate collapse either -because Xi will move in fast- but Trump is not going to provide the same financial and economic lifelines that the other four-eyes will trigger.
Reuters is reporting that tomorrow the U.S. will formally declare a “non-extension” of the USMCA trade agreement {ARTICLE} and that triggers a 10-year period to decoupling. It is very important to understand there is a difference between announcing a “non-extension” and announcing a “withdrawal“. The Canadians are completely confused about what is about to happen.
In a non-extension announcement, the USA is saying they do not want to extend or renew the terms of the agreement beyond the current trade agreement terms. Yes, this is a 10-year exit. However, that’s not the part that matters. Announcing a decision to exit the USMCA (CUSMA), a full withdrawal from the trilateral deal, triggers a six-month countdown to exit.
The deadline to announce the decision to extend is tomorrow, July 1st. There is no deadline on the timeline to announce an exit or withdrawal from the USMCA. That announcement can happen at any time.
Put simply, announcing a non-renewal is a 10-year exit. Announcing a withdrawal is a 6-month exit. The announcement to withdraw can come at any time after the statement of non-renewal.
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Posted in Auto Sector,
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Canada,
Donald Trump,
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Mexico,
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Uncategorized,
USA,
USMCA