TORONTO — Canadian automotive stocks were rallying after the U.S. and Mexico announced they have reached a bilateral “understanding” on a trade agreement.
Shares in companies including Linamar Corp., Magna International Inc. and Martinrea International Inc. were up despite U.S. President Donald Trump’s threat to impose tariffs on automotive imports if a trade deal can’t be reached with Canada.
The preliminary agreement between Mexico and the U.S. includes a provision that 40 to 45 per cent of auto content would be made by workers earning at least US$16 per hour, as well as 75 per of auto content be made in the U.S. and Mexico.
Unifor president Jerry Dias says if auto content and wage agreements go forward with Canada on board as well it could “stop the bleeding” in the Canadian auto sector to lower wage jurisdictions.
Bill Anderson, director of the University of Windsor’s Cross Border Institute, says he’s concerned about a condensed negotiation window now that key issues between the U.S. and Mexico look to be settled but that a deal could benefit Canada’s auto industry.
Trump has invited Canada to rejoin trade negotiations but linked an auto deal to concessions on Canada’s agricultural tariffs.
Companies in this story: (TSX:LNR, TSX:MG, TSX:MRE)
The Canadian Press