Breaking! Affected by the latest news of the China-US trade war, both the Canadian and US stock markets rose during trading this morning (May 12). Additionally, the renminbi has strengthened as a result, correspondingly, the exchange rate of the Canadian dollar to the renminbi has "plummeted"!

Source: Pool photo by Feng Li

North American Stock Markets Surge

The S&P/TSX Composite Index rose by 140.37 points to 25,498.11.

Source: Reuters

In New York, the Dow Jones Industrial Average increased by 914.10 points to 42,163.48. The S&P 500 Index rose by 138.39 points to 5,798.30; the Nasdaq Composite surged by 621.50 points to 18,550.42.

The Canadian dollar traded at 71.44 cents against the U.S. dollar, compared to 71.80 cents on Friday.

The June crude oil futures contract climbed $1.44 to $62.46 per barrel; the June natural gas futures contract fell 18 cents to $3.62 per million British thermal units.

The June gold futures contract dropped $100.80 to $3243.20 per ounce; the July copper futures contract fell 3 cents to $4.62 per pound.

Canadian Dollar to Renminbi Exchange Rate Plummets

Meanwhile, the Canadian dollar to renminbi exchange rate, which Canadian Chinese people are more concerned about, has "plummeted": from 5.19 yuan yesterday to 5.14 yuan now (Toronto time, May 12 at 2 p.m.), and it is still falling.

Source: Google Finance

In the past month, the Canadian dollar to renminbi exchange rate has mostly been above 5.25 yuan, once reaching 5.28 yuan. Currently, this exchange rate has been falling for an entire week.

Source: Google Finance

China-US Joint Statement: Trump Cancels Most Tariffs

According to reports from the CCTV News, on May 12, the "Joint Statement of China-US Geneva Economic and Trade Talks" was released, with the following content:

The Government of the People's Republic of China ("China") and the Government of the United States of America ("United States"),

recognizing the importance of bilateral economic and trade relations to both countries and the global economy;

recognizing the importance of sustainable, long-term, mutually beneficial bilateral economic and trade relations;

in view of recent discussions, believing that continuous consultations will help address concerns in the economic and trade field;

in the spirit of mutual openness, continuous communication, cooperation, and mutual respect, continue to advance relevant work;

committing to take the following measures by May 14, 2025:

The United States will (i) modify the ad valorem tariffs imposed on Chinese goods (including goods from the Hong Kong Special Administrative Region and the Macao Special Administrative Region) specified in Executive Order No. 14257 dated April 2, 2025, with 24% of the tariff suspended for the initial 90 days, while retaining the remaining 10% of the tariff as stipulated in the order; (ii) cancel the additional tariffs imposed on these goods under Executive Orders No. 14259 dated April 8, 2025, and No. 14266 dated April 9, 2025.

China will (i) correspondingly modify the ad valorem tariffs imposed on U.S. goods as specified in Announcement No. 4 of the Tariff Commission of the State Council dated 2025, with 24% of the tariff suspended for the initial 90 days, while retaining the remaining 10% of the tariff and canceling the additional tariffs imposed under Announcement Nos. 5 and 6 of the Tariff Commission of the State Council dated 2025; (ii) take necessary measures to suspend or cancel non-tariff countermeasures implemented against the United States since April 2, 2025.

After taking the above measures, both sides will establish mechanisms to continue consultations on economic and trade relations. The Chinese representative is Vice Premier He Lifeng, and the U.S. representatives are Treasury Secretary Scott Bessent and U.S. Trade Representative Jamison Greer. Consultations can be held in China, the United States, or a third country agreed upon by both parties. As needed, both sides may conduct working-level consultations on relevant economic and trade issues.

Ambassador of the United States to Canada Says: The UK Model Is the Direction of Canada's Future Tariffs

What about Canada when the U.S. suddenly makes concessions to China?

The U.S. ambassador to Canada said that although the tariffs Canada faces after reaching a trade agreement in the future may not be "fully eliminated," the two countries are moving toward a stronger relationship. The new U.S.-UK trade framework announced last week retains the U.S. benchmark tariff of 10%, and this model is "the direction we might take in the future."

Source: Global News

Pete Hoekstra, appointed by President Trump as the U.S. Ambassador to Canada, stated that Prime Minister Mark Carney's visit to the White House last week laid the groundwork for the possibility of establishing new partnerships in economics and security between the two countries.

Hoekstra told Mercedes Stephenson, host of "The West Block," in an interview, "People talk about restarting or resetting, but I personally don't like this term."

Source: Global News

"Yes, we have had several months of ups and downs. But we have strong economic ties, national security ties, and personal connections... This foundation is very solid. We will be stronger in the future. Judging from the interactions between the prime minister and the president, they both want to achieve the same goals," he said.

However, Hoekstra noted that even under a new trade agreement, certain Canadian exports to the U.S. may still face some level of tariffs, though possibly lower than the current levels.

Source: Global News

He pointed out that the new U.S.-UK trade framework announced last week retains the U.S. benchmark tariff of 10% and also opens up the British market to U.S. products. This model is "the direction we might take in the future."

"I'm not sure if the tariffs on Canada will be completely eliminated," he said.

"There are indeed some tricky issues that need to be negotiated and resolved. But I believe that both leaders want to put these issues behind them and focus on building a framework that brings prosperity to both countries. We still can't know exactly what the final agreement will look like."

Source: globalnews

Since President Trump took office in January this year, he has imposed 25% tariffs on Canadian goods, with energy exports at 10%, citing concerns over fentanyl smuggling and immigration issues at the northern border. Canadian automobiles, steel, and aluminum products also face 25% tariffs, and softwood lumber tariffs have been raised.

Although some goods under the Canada-U.S.-Mexico Free Trade Agreement (CUSMA) have received tariff exemptions, these tariffs still impact Canada's economy, exacerbating concerns about a possible economic recession.

Original article: https://www.toutiao.com/article/7503704749569606184/

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