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business briefing

Briefing highlights

  • What we think of trade
  • A Trump scene I’d love to see
  • Markets at a glance
  • Tesla tumbles as SEC moves against Musk
  • Economy expands 0.2 per cent
  • BlackBerry profit tops estimates

What we think of trade

The Canadian, American and Mexican governments may be tying themselves in knots trying to remake NAFTA, but only minorities of their citizens believe trade drives three key benefits.

That’s not to suggest most don’t think trade is good for their country – indeed, just the opposite – but fewer than 50 per cent of those surveyed by the Pew Research Center believe it creates jobs, boosts wages and lowers prices.

This comes as Canadian and American negotiators are deadlocked in talks to remake the North American free-trade agreement, with the latter pushing Ottawa to join Mexico in what is now a bilateral deal.

Negotiations are stalled against what the U.S. says is a Sept. 30 deadline, with Prime Minister Justin Trudeau reiterating Wednesday that he won’t be pushed.

“We will keep working as long as it takes to get the right deal for Canada,” Mr. Trudeau told reporters in New York.

Amid the dread over the impact of a NAFTA collapse, though, is Pew’s survey of global trade showing a weak attitude in the three countries when it comes to those three big things.

“Their publics overwhelmingly think trade is good for their countries, in principle,” said Bruce Stokes, Pew’s director of global economic attitudes.

“But, in practice, in no NAFTA nation does a majority of adults believe that trade creates jobs, raises wages or lowers prices,” he added, outlining the survey of more than 30,000 people in 27 countries.

“Canadians are more likely than Americans and Mexicans to say that trade generates jobs. And Canadians and Mexicans are less likely than Americans to hold the view that trade lowers prices.”

Other parts of the Pew survey showed that in 20 of the countries surveyed, those with higher income levels were more likely to think trade fuels job creation.

“This includes majorities of upper-income adults in Canada, Hungary, Indonesia, Israel, the Netherlands, Poland, South Korea and Spain,” Mr. Stokes said in his report.

“In some countries, the difference in views between those with a higher income and those with a lower income can be quite large: 19 points in Germany, 18 points in the Netherlands, and 16 points in Canada, Hungary and Brazil.”

Added to that is the fact that “even though most Americans are open to trade as a matter of principle, their enthusiasm has long trailed that in some other countries.”

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A scene I’d love to see

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Markets at a glance

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Tesla tumbles

Shares of Tesla Inc. are tumbling as the Securities and Exchange Commission moves against chief executive officer Elon Musk.

Elon MuskPETER PARKS/AFP/Getty Images

This comes after the SEC accused Mr. Musk of fraud and moved to block him from his role as CEO, claiming he made misleading tweets about taking the electric car company private.

Mr. Musk denied the allegations.

Citigroup analyst Itay Michaeli cut his target price on Tesla stock sharply, to US$225 from US$356, and downgraded his rating to “sell/high risk” from “neutral/high risk,” citing two scenarios: Mr. Musk leaves the company or stays after settling or prevailing.

“There’s little question that Mr. Musk’s departure would likely cause harm to Tesla’s brand, stakeholder confidence and fundraising – thereby increasing the risk of triggering a downward confidence spiral given the state of Tesla’s balance sheet, in our view,” Mr. Michaeli said.

“For the second scenario, if Mr. Musk ends up staying on, the reputational harm from this might still prevent the stock from immediately returning to ‘normal,’” he added.

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Economy expands 0.2 per cent

Canada’s economy expanded by 0.2 per cent in July, kicking off the third quarter on a somewhat better-than-expected note.

The manufacturing, wholesale trade, utilities and transportation sectors led the gains, Statistics Canada said today.

Economic growth had flatlined in June, and economists had expected July’s reading to show a rise of 0.1 per cent.

Notable in today’s reports, was the strength of manufacturing, which, with growth of 1.2 per cent, was the best showing since November, 2017.

Also notable was the rise of the real estate industry, which has been by policy measures aimed at cooling inflated housing markets.

“The output of offices of real estate agents and brokers grew 1 per cent, as home resale activity increased in the majority of markets, led by growth in Ontario,” Statistics Canada said.

“This was the third increase in four months, following a 13.5-per-cent decline in the first quarter of 2018.”

Construction, though, fell for the third time in four month, with residential building down 1.5 per cent.

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