(Bloomberg) — The US is pressing the need for allies to coordinate against economic coercion, not just military threats, as Japan prepares to host top diplomats from the Group of Seven nations amid heightened tensions with China.
“That coercion piece is important,” US Ambassador to Tokyo Rahm Emanuel said in an interview days before the ministerial meeting begins in the mountain resort of Karuizawa on Sunday. “It keeps the United States in the center of gravity and helps our allies and alliance and our friends to know that we are in the game.”
China is set to be a key focus of discussions at the meeting, which will lay the groundwork for a leaders’ summit in Hiroshima next month. Japanese Prime Minister Fumio Kishida has invited a raft of guest leaders from Asia and beyond, including from South Africa and South Korea.
One person not invited is Chinese President Xi Jinping, who has been on a diplomatic charm offensive of late in a bid to push for peace in Ukraine and attract more foreign investment to the world’s second-biggest economy following years of isolation due to strict Covid restrictions.
Japan has put an emphasis on economic coercion and is aiming for outcomes by the leaders’ summit, people familiar with the deliberations said.
Read: US Criticizes China’s Pattern of Moves Against Foreign Firms
Meanwhile, a prominent Republican lawmaker has blasted Beijing for what he sees as an unjust pressure campaign. “Coercion is core to China’s economic model,” Representative Michael McCaul, who chairs the House Foreign Affairs Committee, said during a visit to Asia this month.
Xi last week hosted French President Emmanuel Macron, who was forced to defend comments to several media outlets that Europe shouldn’t simply follow the US over Taiwan. Brazilian leader Luiz Inacio Lula da Silva, who is set to meet Xi on Friday in Beijing, this week called on BRICS nations to come up with an alternative to the dollar in foreign trade.
The G-7 will look to refocus the discussion on Chinese economic coercion. Trade ministers said in a statement earlier this month they would seek ways to work together to counter coercion that “undermines economic security.”
While that statement didn’t mention China, it follows a campaign by the Biden administration to corral support from allies in reducing dependence on Beijing for key elements in supply chains, such as semiconductors. Japan last month became the latest to announce restrictions on exports of some of its most advanced chip technology, following similar moves by the US and the Netherlands.
Emanuel said China’s strategy on coercion was “part of a defense build-up” and not “some aberration.” In an analysis on the topic distributed to media, he said a long list of countries including Japan, the Philippines, South Korea and Australia had encountered coercion from China in the recent past.
The G-7 and the US-led Indo-Pacific Economic Framework for Prosperity are potential forums for formalizing rules on how to deal with the issue, Emanuel said in the interview.
‘Diminishing Tool’
“The optimal goal would be to know that this is a diminishing tool by China and or Russia,” he added.
The moves by the US and its allies have attracted criticism from China, which has countered with similar accusations of coercion by the US and urged other countries to resist American pressure.
Chinese Vice Commerce Minister Wang Shouwen on Wednesday told Japan’s ambassador he was concerned about restrictions on semiconductor exports, and asked Japan to support its efforts to join the regional trade deal known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The US pulled out of that grouping under former President Donald Trump in 2017.
Meanwhile, Emanuel said the US would continue to press Japan on a long-delayed bill aimed at “promoting understanding” of sexual minorities. Banning discrimination against LGBTQ individuals would be in line with the country’s constitution and public opinion, he said.
Hopes by activists that the bill might pass ahead of the G-7 summit look likely to be dashed, as it remains mired in political wrangling.
Japan is the only G-7 member that doesn’t recognize same-sex marriage or civil unions, nor does it have legislation banning discrimination against LGBTQ individuals. That fact came under renewed focus after Kishida was forced to fire an aide for making discriminatory remarks earlier this year.
Kishida signed up to last year’s summit communique in Elmau, in which the leaders pledged to ensure that everyone “independent of their gender identity or expression or sexual orientation” has the same opportunities and is protected against discrimination.
“We have secured that the communique from G-7 around LGBTQ issues will be as strong, if not stronger, than what Germany issued,” Emanuel said. “It’s a big issue, it’s an important issue.”
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
