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BMO report sees consumers hurt most if NAFTA ends

BMO Capital Markets has released a report saying consumers would be “the biggest net loser from the termination of NAFTA in all three partner countries,” if the trade agreement were dissolved. BMO Capital Markets is the investment banking subsidiary of Canadian Bank of Montreal.

The report expects consumer prices in Canada to be roughly POINT-8 percentage points higher, because of the weaker exchange rate and modestly higher tariffs, if NAFTA were dropped.

The macroeconomic impact in the U.S. is expected to be less severe—but still a negative. BMO expects the transportation equipment and textile industries to be vulnerable without NAFTA as well as border states and states with heavy agriculture exposure as the most vulnerable.

The BMO Capital report says even if the U.S. reaches its goal of reducing its trade deficit with NAFTA partners, it’s possible that would be offset by an even wider gap with Europe and Asia.

 

 

 

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