|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||27.61 - 27.89|
|52 Week Range||25.58 - 30.60|
|PE Ratio (TTM)||15.03|
|Expense Ratio (net)||0.49%|
CNBC's Dominic Chu reports that ETFs tracking Canada and Mexico are falling after reports that President Trump is expected to announce a withdrawal from the North American Free Trade Agreement.
The U.S. president made good on his word and signed two orders imposing tariffs on steel and aluminum imports, while excluding Canada and Mexico as negotiations on the North American Free Trade Agreement (NAFTA) are a work in progress. The decision had ripple effects across the semiconductor sector and prompted investors to act with caution, while ETFs linked to Canada completed the podium. Corporate bonds were sought after as a way to divest from risky assets and emerging markets equities came in last for the week.
President Trump formalized a blanket tariff of 25% on all steel imports and 10% on all aluminum imports. Canada exports the most steel to the US. In the first 11 months of 2017, Canada accounted for 16% of the US steel imports (X) (AKS). Overall, 25% of the US steel imports (MT) came from NAFTA during the same period.
One of the key reasons for tariffs is to protect domestic industries, jobs, and consumption. Tariffs inflate costs for consumers and protect inefficient domestic companies from global competition. Consumers could be forced to purchase expensive steel from US producers to avoid a 25% tariff, but domestically produced steel could be more expensive than global steel.
President Donald Trump’s announcement about tariffs on steel (SLX) and aluminum (AA) imports shouldn’t come as a surprise, as he’s been on this path since taking office last year. One of the first trade policy actions from the Trump administration was to withdraw from the Trans-Pacific Partnership, which would have created the largest economic block. Then there’s the North American Free Trade Agreement (or NAFTA) involving Canada (EWC) and Mexico (EWW), which the Trump administration is trying to renegotiate.
Certain specific country focused funds experience high outflows on fears of continued slowdown in the markets owing to a potential trade war.
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The North American Trade Agreement, also known as NAFTA, may crumble if a deal between the three member countries is not reached in the coming months. Combined with the U.S. government shutdown, the NAFTA debacle put pressure on the U.S. dollar, which took first place in the list. Canada took second place in the list as the nation’s central bank raised interest rates. Platinum has been on a tear lately, taking third place, while consumer discretionary equities and South Korea close out the list. Check out our previous trends edition at Trending: Bonds Under Pressure as Investors Move to Equities.
NAFTA has been a creator of jobs in Canada, Mexico and the U.S. and to turn our backs on them would be a very, very bad decision, Dennis Gartman said.
Shares of companies and ETFs that benefited under NAFTA are falling after a report that President Trump could announce an exit.
The Canadian dollar and the country's stocks fell on Wednesday on the back of a report that says President Donald Trump could pull the U.S. out of NAFTA.
In November, aluminum shed almost 5.0% and copper lost ~0.3%. However, we’ve seen a fresh wave of selling in industrial metals this month.