Relations between the United States and Canada, which were already tense, are likely to deteriorate further, after the United States moved forward, early Tuesday morning, with implementing a decision to ban Canadian imports worth about a billion dollars from entering the American market, including dairy products and motorcycles.
The value of the products scheduled to be banned represents a negligible percentage of the total volume of trade exchange between the two neighbors, which amounts to about 880 billion dollars, but the ban decision, which began to be implemented in the early hours of today, represents a new escalation on the part of US President Donald Trump, in his trade war with one of his country’s oldest allies and trading partners.
Patrick Childers, a trade lawyer, partner at Holland & Knight Consulting, and a former US government trade official, said that banning imports “certainly will do nothing useful in calming trade tensions between the United States and Canada.”
The latest round of trade tensions between Washington and Ottawa began when Trump resorted to a law dating back to the Great Depression in the 1930s, to impose 50 percent duties on Canadian products worth $20 billion, accusing Canada of discriminating against American dairy products, cars, and alcoholic beverages.
Canada responded by imposing duties ranging between 15 and 25 percent on American products for the same value as its products subject to American duties.
To punish Canada for its response to his tariffs, Trump decided to impose a ban on a list of Canadian products, starting from the first minute of the day, US East Coast time.
The economic impact of this ban is likely to be very minor.
Childers pointed out that the list of banned products is already subject to Trump’s high tariffs. “For most of these goods, imposing a 50 percent tariff is an effective ban on them entering the American market; Because it makes importing them from Canada to the United States economically unprofitable.”
Jacob Jensen, director of the trade policy department at the center-right American Business Forum think tank, said the ban actually includes Canadian products worth $967 million, according to past world trade figures. Alcoholic beverages represent about 89 percent of them, due to some Canadian provinces withdrawing American alcoholic beverages from their stores, in response to the trade war that Trump is waging against Canada.
Bank of England data showed on Tuesday that unsecured lending to British households rose in August at the fastest annual pace since at least 1993, while the number of approved mortgage applications fell to the lowest level in nearly three years.
Net unsecured consumer lending rose by 2.464 billion pounds ($3.26 billion) on a monthly basis, far exceeding economists' expectations for an increase of 1.9 billion pounds, and marking the largest increase since monthly data records began in 1993. This series does not take into account the impact of inflation, according to Reuters.
British lenders approved 54,918 mortgages for home purchases last month, the lowest level since December 2023, and lower than the average forecast of 56,100 loans in a survey conducted by the agency of economists.
Lenders approved 55,928 mortgage loans in July.
The performance of Gulf markets was mixed in early trading on Tuesday, as investors awaited renewed diplomatic efforts to end the conflict between the United States and Iran.
The main index of the Saudi market fell by 0.4 percent, affected by the decline of “Ma’aden” stock by 1.9 percent, while “Saudi Aramco” stock fell by 0.2 percent.
The main index of the Qatar Stock Exchange fell 0.5 percent, with the stock of Qatar National Bank declining. The largest Gulf banks, by 0.9 percent.
On the other hand, the Dubai Financial Market index rose by 0.2 percent, supported by the rise of the Dubai Islamic Bank stock by 0.1 percent, while the Abu Dhabi Securities Market index almost stabilized.
Gas supply disturbance
The continued disruption of liquefied natural gas flows cast a shadow on investor sentiment. Qatar Energy has extended its force majeure notices, and will not be able to deliver shipments of liquefied natural gas to the Italian company Edison and some Asian customers, as long as the Strait of Hormuz is closed, according to Edison and trade sources.
Renewed US-Iranian talks
American and Iranian officials held separate talks with mediators on Monday, according to officials from both countries, in a renewed effort to end the war.
Any new negotiations are expected to focus on a modified version of the proposal that Iran presented for seven days last week, on the sidelines of the UN General Assembly meetings, according to an official familiar with the talks.
