Business Brief: Friends and foes

Good morning. In today’s newsletter, we’re looking at a few awkward alliances being made as a result of the U.S. trade war.

Up first

In the news

On the road: BlackBerry Ltd. has secured a US$100-million-plus deal for its new Alloy Kore automotive software with Coretura AB, a joint venture between truck-making giants Daimler Truck and Volvo Group.

In the pipeline: Ottawa offers First Nations $2.5-million each if they sign on to TMX pipeline equity deal.

Getting to work: Ottawa tables a bill to amend the labour code and speed up project approvals. The changes are drawing scorn from unions and labour experts.

In focus

What canning CUSMA looks like

Donald Trump’s tariffs have disrupted decades of global economic integration and rewired supply chains. They’ve also produced some fresh geopolitical pretzels. Compartmentalization is the hottest new trend in diplomacy.

China can help: The U.S. President’s levies on aluminum imports have torn apart decades-old supply chains and weighed on manufacturers on both sides of the border. We can pour one out, too, for Canadian breweries: Prices of aluminum cans in North America have risen by about 50 per cent since early last year, Nathan VanderKlippe writes.

As a result, Canadian companies navigating the demise of the Canada-U.S.-Mexico trade pact are sourcing from factories outside of Shanghai, which are selling cans at a one-third discount to those in the U.S.

The global price of aluminum has surged by about 15 per cent since the U.S.-Israeli attack on Iran in February. That might not sound like much, but because aluminum is the second-most-ubiquitous structural metal on Earth – surpassed only by steel – price moves of any kind can show up across the economy, weighing on automakers, construction companies and consumer electronics.

And also on breweries, where cans are often the single most expensive item on the list of goods that go into a serving of beer, VanderKlippe reports. The difference reaches eight cents a can, no small potatoes for Canada’s hundreds of brewers, who together fill 3.7 billion cans a year.

While relations between Ottawa and Beijing have warmed under Prime Minister Mark Carney, China still enforces a 100-per-cent retaliatory tariff on Canadian canola oil. Friend? Foe? Both! This is the kind of thing Carney might call “variable geometry.”

A boon for Belarus: Yesterday, Trump said he was working on a “massive deal” to import potash from Belarus, an Eastern European dictatorship closely allied with Russia, in a bid to undercut Canada amid a continental trade war.

Even as Trump, uh, trumpeted the potential deal on social media, Belarus said the country doesn’t have much fertilizer to export to the U.S. because it is already bound for China, The Globe’s Kate Helmore and Adrian Morrow report.

Trump didn’t disclose the terms of the deal, but said the pricing would be “substantially less than we are currently paying to Canada.”

According to my (admittedly unreliable) math, it would have to be substantially substantially less (I’m great at writing, too!) to make up for the cost of transporting the goods from the landlocked nation to the U.S. via longer and more expensive Russian routes spanning roughly 10,000 kilometres.

Belarus has been sanctioned by the European Union, Canada and the United States itself over the communist country’s role in the war against Ukraine.

Experts say Belarusian President Alexander Lukashenko, in power since 1994, has repressed government critics through arrests, imprisonment, and surveillance. Again, a tidy bit of compartmentalization. The U.S. condemns Belarus for supporting Russia’s war in Ukraine, but there is room for common ground when that ground needs fertilizer.

The crude pivot: Alberta crude fuelled a record amount of cargo moving through the Vancouver Fraser Port Authority’s gates in the first half of the year.

Port authority chief executive Peter Xotta said yesterday that the U.S. percentage of crude oil shipments is declining, as China and other Asian destinations increase.

As Asia’s oil intake swelled by 24 per cent, America’s shrank, a marked change from 2025. The share of U.S.-bound crude exports via Vancouver dropped to one-fifth versus a third the year before.

Let’s get multilateral: As ships are rerouted, deals are made with rivals of yore, and the rules-based order continues to crumble, Canada and other world leaders announced the creation of a new body aimed at strengthening international co-operation.

Unfortunately, it is not in the form of a giant robot and/or kaiju. But hey, the new “Partners for Multilateralism (P4M)” might be just the ticket.

Announcing the program earlier this week, Carney, Brazilian President Luiz Inácio Lula da Silva, European Council President António Costa and Kenyan President William Ruto said the aim of P4M is to “create a flexible, open framework for countries from different regions and political traditions that are willing to work across divides, to build coalitions for reform and to translate shared principles into practical action.”

They said P4M will support the reform of the United Nations and other multilateral organizations “to make them more representative, legitimate, effective and trusted,” Steven Chase reports.

Can you imagine those strategy meetings? The effort to make multilateralism more efficient will involve a considerable number of meetings about multilateralism.

With a file from The Canadian Press

Charted

Tempered expectations: Achim Hurrelmann, a professor of political science and co-director of the Centre for European Studies at Carleton University, says Carney’s beautiful Euro vision must meet harsh realities of geography, regulation and managing expectations.

Quoted

For Millennial parents, the landline is making a comeback.

Morning update

Global stocks turned higher in choppy trading as technology shares got a boost from resurgent AI optimism, while broader equity markets eyed oil prices and bond yields for direction.

Wall Street futures were muted to the upside, while TSX futures followed sentiment higher.

Overseas, the pan-European STOXX 600 was up 0.55 per cent in morning trading. Britain’s FTSE 100 edged up 0.18 per cent, Germany’s DAX rose 0.64 per cent and France’s CAC 40 advanced 0.61 per cent.

In Asia, Japanese markets were closed for a holiday, while Hong Kong’s Hang Seng climbed 0.18 per cent.

The Canadian dollar traded at 71.26 U.S. cents.