Canada Looks Beyond the US

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Good morning, New day new rhythm. Like Canada shifting gears in trade, maybe today’s the day you take a fresh turn too. Step forward with clarity and calm, the road ahead is yours to redraw.

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TARIFF
Canadian firms pivot from US

President Trump’s tariff war and annexation threats have Canadian firms scrambling to ditch their heavy reliance on US markets. PNP Pharmaceuticals in British Columbia is eyeing Asia for new partners, while steel component maker Wellmaster warns US clients of price hikes after Trump’s 25% tariffs on steel, aluminum, and non-compliant auto parts hit in March. Mascot costume producer Concept Factory slashes prices to cling to American buyers, feeling the squeeze.

Canada, historically sending 75% of its exports to the US, faces a reckoning—42% of its manufacturing output and 41% of its 1.7 million workers depend on this trade. Prime Minister Mark Carney, fresh off an election win, meets Trump Tuesday to navigate the fallout, declaring the old US relationship “over.” Firms like LabelPak Printing are doubling down on Canadian markets, wary of Trump’s erratic policies, despite the smaller economy and high overseas shipping costs.

Consultants like Mike Chisholm urge diversification—some companies are opening offices in Europe and Asia, while others renegotiate contracts to share tariff burdens, straining ties. Trump’s fentanyl-driven tariff justification, despite less than 1% of seizures tracing to Canada, adds fuel to the fire. As businesses pivot, the once-cozy North American trade bond frays, with stability now the golden prize.

ECONOMY
US trade deficit soars pre-tariff

It was a mad dash to beat the clock. US companies, sensing President Trump’s tariffs looming, flooded ports with goods, pushing the trade deficit to a record $140.5 billion in March, up 14% from February, per the Commerce Department. A 71% surge in pharmaceutical imports to $50.4 billion led the charge, doubling the goods-trade deficit with Ireland to $29.3 billion, outstripping China’s $24.8 billion shortfall.

The frenzy took its toll—Q1 GDP shrank 0.3%, the first contraction since 2022, with net exports slashing nearly 5 percentage points from growth. Imports hit a record, jumping 4.4%, while exports barely budged at 0.2%. Trump’s April 2 tariffs, ranging from 10% to over 120%, spared drugs for now, but a decision on pharmaceutical duties looms, keeping uncertainty alive.

Bloomberg Economics sees light ahead, noting a dip in China-US shipping since mid-April, hinting the import rush is fading. The Institute for Supply Management confirms manufacturers are pulling back on imports, suggesting a potential deficit shrink and GDP rebound. Trump’s push for fair trade and domestic production aims to reshape commerce, but for now, the March data shows how policy anticipation can jolt an economy.

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ENERGY
Tariffs and OPEC+ slash Oil prices

Oil prices tanked nearly 25% since Trump’s January 20 inauguration, with Brent dropping from $80 to $62 and WTI from $76 to $59. Trump’s April 2 tariffs, sparking a trade war and retaliatory moves from China, slashed global growth forecasts—IMF now predicts 2.8% for 2025, down from 3.3%—curtailing oil demand. OPEC+ added fuel to the fire, boosting output by 411,000 barrels daily in May and June to pressure overproducing members like Kazakhstan and Iraq.

Importers rejoice as fuel costs dip—Europe sees a 24% price drop in euros, and US gasoline nears $3 a gallon, spurring demand. But exporters like Saudi Arabia, needing $90+ per barrel to break even, face a looming $67 billion deficit, per Goldman Sachs. US producers, eyeing WTI below $60, scale back drilling, with shale output set to decline.

The energy transition hangs in limbo—low oil prices could slow EV adoption, but Europe’s renewables push, fueled by energy security fears, remains steady. As trade tensions and supply gluts reshape the oil landscape, the ripple effects test budgets, industries, and green ambitions worldwide.

AI & TECHNOLOGY
FutureHouse unveils AI biology tool Finch

FutureHouse, an Eric Schmidt-backed nonprofit, just rolled out Finch, an AI tool for “data-driven” biology discovery, hot on the heels of its API launch. Finch digests research papers and prompts—like “What drives cancer metastases?”—then crunches code, generates figures, and inspects results, acting like a “first-year grad student,” per CEO Sam Rodriques. He boasts it uncovers “cool stuff” in minutes, a game-changer for their internal projects.

The tool taps into the hype of AI revolutionizing science, with players like OpenAI and Anthropic betting on breakthroughs, especially in the $65.88 billion drug discovery market. But the reality check stings—AI’s track record in biology is spotty, with firms like Exscientia facing trial flops and tools like AlphaFold 3 showing inconsistent accuracy. Finch isn’t immune, making “silly mistakes,” Rodriques admits.

FutureHouse is now in closed beta, recruiting bioinformaticians to refine Finch’s reliability. While the dream of an “AI scientist” looms large, the path to a true breakthrough remains uncharted, as biology proves a tough nut for AI to crack.