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China economy takes another trade war hit

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Fallout from the trade war with the United States has dealt another blow to China’s slowing economy.

Imports and exports fell more than expected last month, official data published by the General Administration of Customs on Monday revealed.

Globally, exports from the world’s second-largest economy dropped 3.2% in September from the same period last year while imports dived 8.5%.

The figures were worse than expected and were released just days after a “mini trade deal” between China and the US was agreed at the end of last week.

“The mini US-China trade deal reached on Friday doesn’t alter the outlook significantly,” Martin Lynge Rasmussen, a China economist at consultancy Capital Economics, said in a note.

“Looking ahead, exports look set to remain subdued in the coming quarters. Meanwhile, import growth has slowed sharply in recent quarters and now looks unusually weak relative to economic growth. A partial rebound in headline import growth is therefore likely in the near term,” he added.

To illustrate the impact of the 15-month long dispute, the European Union has now replaced the US as China’s top trading partner amid a bruising tariffs conflict.

Engulfed in an impeachment inquiry, US President Donald Trump heralded the deal as a major breakthrough.

Imports from the US plunged by 26.4% last month compared to the same period in 2018. The trade surplus with China also narrowed 3.9% to US$25.8 billion in September from $26.9 billion in August.

On Friday, a shaft of light did appear to pierce the gloom when China promised to increase US agricultural purchases in a partial Sino-US agreement, which also includes safeguards for intellectual property rights and a further opening up of financial markets.

Engulfed in an impeachment inquiry, US President Donald Trump heralded the deal as a major breakthrough.

But it may only offer a temporary tariff reprieve because it lacks specifics and leaves the thorny issues such as unfair state subsidies until future negotiations.

“The external environment facing China’s foreign trade development is still complicated and severe. Instability and uncertainty are increasing,” Li Kuiwen, a spokesman for the General Administration of Customs, told a media briefing.

So far, Washington and Beijing have imposed punitive tariffs covering more than $360 billion worth of goods in two-way trade.

This, in turn, has slowed the world’s two largest economies.

For China, the downturn has continued across a broad range of sectors, from retail sales to industrial output, which plunged to a 17-year low in August. Big-ticket items such as new car sales have stalled while residential property prices have also suffered as consumer debt increased.

Last week, figures showed that the services sector grew at its slowest pace in seven months in September. The Caixin/Markit PMI fell to 51.3, the weakest since February, compared to 52 in August. But it still stayed above the 50-point mark, which separates expansion from contraction.

“China’s economy showed signs of marginal recovery in September,” Zhong Zhengsheng, the director of macroeconomic analysis at CEBM Group, said in a statement. “However, the rising costs of labor and raw materials restrained business confidence.”

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Canadian ministers meet with CN Rail

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Canada’s Liberal government sent two ministers on Monday to meet with representatives of Canadian National Railway and its largest union, as already hard-hit shippers pleaded for government intervention to avert a strike planned for early on Tuesday.

The threatened strike by 3,000 workers with Teamsters Canada comes after CN, the country’s largest railroad operator, said on Friday it would cut management and union jobs, as it grapples with softer economic conditions.

Labour Minister Patty Hajdu and Transportation Minister Marc Garneau were to meet with representatives from CN and the union in Montreal, Hajdu’s press secretary Veronique Simard said, following a stalemate in contract talks.

CN said it believes a strike can be averted “with the assistance of federal mediators,” after Teamsters declined to submit to binding interest arbitration.

“We expect talks to continue up to Nov. 19,” CN said.

Teamsters and CN reached a last-minute deal in 2017 that averted a planned strike. Canada, one of the world’s biggest exporters of farm products, relies on its two main railways to move canola and wheat over the vast distances from western farms to ports. Crude oil shippers in Alberta have also used trains in the past two years to reach U.S. refineries as an alternative to congested pipelines.

Urging Ottawa to intervene

Alberta wheat and barley commissions, representing farmers, urged Ottawa to intervene, as they are already facing difficult harvest conditions because of weather. “There are a lot of farmers who already have a significant amount of their income trapped under snow,” said Gary Stanford, Alberta Wheat Commission chair. “Now adding insult to injury, we’re looking at possible CN rail strike action too.”

CN was expecting slightly lower fourth-quarter crude shipments from the third quarter, officials said on an Oct. 22 conference call.

“The minute they start shutting down trains you start backing up the grain elevators and you start backing up stuff on the farm,” Ward Toma, General Manager for Alberta Canola, said. “You start backing all that stuff up that not only affects farmers — but canola crushers send oil via rail, and canola meal via rail to the United States — you lose that ability, you start backing things up.”

Toma says according to Alberta’s last agriculture report, 20 per cent of the canola crop is still out in the fields. And he says this is the time of the year farmers look to sell and pay their bills by the end of the year.

“They’re busy, they still haven’t got the crop off and they are trying to move product.”

Slumping commodity prices, congested oil pipelines and a dispute with China that has hampered Canadian agriculture exports have pressured the economies of resource-rich western provinces.

Teamsters Canada spokesman Christopher Monette said the planned strike by its conductors, train personnel and yard workers comes because workers are “hitting a wall on issues related to health and safety.”

“While we continue to negotiate in good faith and in hopes of avoiding a labour dispute, we have every intention of striking at 12:01 a.m. ET tonight unless an agreement can be reached before then,” Monette said by email.

CN shares were trading down 0.5 per cent in early afternoon Toronto trading.

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Western Forest Products workers ended strike talk without resolution

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Western Forest Products Inc. says negotiations with the United Steelworkers union representing workers in a long-running coastal B.C. strike ended without resolution on the weekend.

The company says no active negotiations are occurring and no future mediation dates have been scheduled after 14 hours of bargaining occurred on Saturday and Sunday supervised by two independent mediators.

CEO Don Demens says the mediators informed the company talks were over after it presented a contract offer.

The strike which began July 1 affects about 3,000 coastal forest workers employed in Western Forest Products’ sawmills and timberlands operations.

Demens says the company offered a five-year agreement with a $2,000 signing bonus and wage increases of two per cent per year for the first four years and 2.5 per cent in the fifth year.

He says the company also agreed to drop proposals to modernize agreements, as well as pension plan alternatives opposed by the union, but didn’t go along with Steelworker demands for a shorter-term agreement, bigger wage hikes and less shift flexibility.

United Steelworkers Local 1-1937 president Brian Butler says the union would release its position on the matter later Monday.

The company’s shares lost five cents or 3.9 per cent at $1.22 in afternoon trading on the Toronto Stock Exchange.

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Over 100 bus cancellations in Metro Vancouver

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Photo: Downtown Vancouver, British Columbia, Canada – December 31, 2018: Bus driving on Granville Street. / Shutterstock

As the transit strike continues in Metro Vancouver, many bus passengers were left waiting a bit longer than usual during their Monday morning commute.

TransLink, the area’s transit operator, lists hundreds of service alerts on dozens of routes across the Lower Mainland as Unifor bus drivers, SeaBus operators and mechanics enter Day 18 of a labour dispute with Coast Mountain Bus Company.

Currently, the transit operator has listed a whopping 427 advisory alerts under its ‘bus’ section. Of course, some of these are scheduled detours, and a few are due to traffic, but the vast majority are cancelled as a result of the transit strike.

For example, the #3 bus, which saw a few cancellations this morning, has a number of advisories listed for this afternoon and evening:

  • 3 Main-Marine Drive Station trip leaving Eastbound W Cordova St @ Seymour St at 4:55 pm
  • 3 Main-Marine Drive Station trip leaving Eastbound W Cordova St @ Seymour St at 4:55 pm
  • 3 Main-Marine Drive Station trip leaving Eastbound W Cordova St @ Seymour St at 3:03 pm
  • 3 Downtown trip leaving Marine Drive Station @ Bay 1 at 2:13 pm
  • 3 Main-Marine Drive Station trip leaving Eastbound W Cordova St @ Seymour St at 5:24 pm
  • 3 Downtown trip leaving Marine Drive Station @ Bay 1 at 4:31 pm
  • 3 Main-Marine Drive Station trip leaving Eastbound W Cordova St @ Seymour St at 3:30 pm
  • 3 Main-Marine Drive Station trip leaving Eastbound W Cordova St @ Seymour St at 3:30 pm
  • 3 Main-Marine Drive Station trip leaving Eastbound W Cordova St @ Seymour St at 1:35 pm
  • 3 Downtown trip leaving Marine Drive Station @ Bay 1 at 12:45 pm

As of 11 a.m. on Nov. 18, approximately 114 bus routes in Metro Vancouver have advisory alerts. Some hard-hit routes include the busy line along Broadway and buses to Simon Fraser University, the University of B.C., the B.C. Institute of Technology and Capilano University.

“We’re expecting 5 to 10 per cent of service to be impacted today due to union job action,” Ben Murphy, TransLink spokesperson, told Vancouver Is Awesome in an email.

“This morning 4 SeaBus sailings also had to be cancelled.  Customers should sign-up for transit alerts and check the TransLink website or Twitter account for the most up-to-date information and impacts being caused by union job action.”

Murphy underscores that the view from Coast Mountain Bus Company is still that the union needs to be more realistic about their wage demands, and that its offer is in excess of other public sector settlements in British Columbia.

“Coast Mountain Bus Company has offered wage increases of more than $6,000 for transit operators and around $10,000 for skilled tradespeople.  This would bring transit operator salaries to just under $70,000, and skilled tradespeople salaries to around $88,000.”

Unifor lead negotiator Gavin McGarrigle and other Unifor representatives held a news conference in New Westminster earlier last week.

McGarrigle mentioned how, “TransLink CEO Kevin Desmond could see his pay soar by 25% to nearly $500,000 a year, while the head of the Toronto Transit Commission earns $150,000 less each year.”

“CMBC President Michael McDaniel has been on the job for about a year and a half and could see his salary soar by 18% to about $372,000,” he said.

McGarrigle added that, “both of these transit executives make more than the Prime Minister.”

“Translink simply doesn’t treat its workers fairly. They divide their workers into separate companies and tell skilled trades not to compare their wages with each other. In the employer’s mind, a comparison to Toronto’s transit system is fine for executive wages, but it’s somehow offside for transit operators,” said Gavin McGarrigle.

With files from the Canadian Press. 

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