Morning Update: Ottawa’s worries grow over Huawei’s global ambitions; Canada to discuss united front on U.S. auto tariffs

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Good morning,

These are the top stories:

Ottawa’s worries over Huawei’s global ambitions are growing

Prime Minister Justin Trudeau is increasingly alarmed about the national-security threat from Chinese high-tech giant Huawei, the world’s largest maker of telecommunications network equipment. Now, he’s working with key Canadian allies to limit its ambition to become a world leader in next-generation 5G wireless technology.

In recent weeks, U.S. President Donald Trump’s national-security adviser, John Bolton, discussed the issue directly with Canada, stressing the need for both a continental China strategy that deals with the country’s economic might and also more narrowly to block Huawei from dominating 5G telecommunications technology. The Globe and Mail also learned that Huawei and its ties to the Chinese government dominated secret intelligence talks on the sidelines of the Commonwealth summit in London on April 19-20.

Canadian officials will not say what measures Canada might take against Huawei, but the senior government insider said national-security officials have been consulting their counterparts in Australia, which is reportedly preparing to ban Huawei from supplying equipment for its planned 5G wireless network. Huawei has already been virtually shut out of the giant U.S. market because of national-security concerns and effectively banned from that country’s future 5G network.

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Canada will join Mexico, Japan, South Korea, EU to plot strategy in case Trump imposes auto tariffs

Canada will join Mexico along with European and Asian auto-producing countries this week to plot strategy ahead of potential tariffs on vehicles and auto parts exported to the United States.

Japan and the European Union organized the meeting for Tuesday in Geneva, where deputy and vice-ministers from Canada, the EU, Japan and South Korea will gather to talk about the punishing levies threatened by Trump. The U.S. President has threatened to impose tariffs under Section 232 of the decades-old U.S. Trade Expansion Act, legislation that allows him to impose duties if the goods being imported are suspected of being a threat to national security. Trump ordered the Section 232 investigation of auto imports on May 23. It’s not clear when the probe will be completed, although the one launched last year into steel and aluminum took several months to issue its conclusions.

Critics warn that the potential tariffs of up to 25 per cent, plus retaliatory measures, could add thousands of dollars to the price of a vehicle, kill jobs and cause significant harm to the global auto industry.

Meanwhile, U.S. companies seeking to be exempted from Trump’s tariff on imported steel are accusing American steel manufacturers of spreading inaccurate and misleading information, and they fear it may torpedo their requests.

Toronto council is preparing to push back against the Premier’s downsizing plan

Toronto’s mayor and most councillors are expected to ratchet up their fight against Doug Ford on Monday as the Premier formally tables legislation that would slash council nearly in half and upend the fall election.

The city’s opposition strategy is expected to take shape early this week, when councillors vote on Mayor John Tory’s call for a referendum about the size of city council. His motion asks the province to conduct a binding referendum on the number and boundaries of the wards in Toronto, or, failing that, change the rules to allow the city itself to put that question on the Oct. 22 election ballot. But political and legal experts warned that Toronto’s resistance could be futile: Ford’s Progressive Conservative Party has majority control of a provincial legislature that has virtually unfettered power over municipalities.

On the mayoral race, Marcus Gee writes that Jennifer Keesmaat poses a challenge to John Tory, and that’s good for Toronto’s democracy. “By filing her papers to run for mayor, she has transformed what was looking like the dullest municipal campaign in years into a straight up horse race. John Tory, the less-than-scintillating incumbent, has reason to be afraid – very afraid” (for subscribers).

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IN CASE YOU MISSED IT

Trump said he’s willing to shut down the government over immigration

Trump said Sunday that he would consider shutting down the government if Democrats refuse to vote for his immigration proposals, including a U.S.-Mexico border wall.

Republicans, trying to protect their majority in Congress, are playing down the chance of a shutdown as the November election nears. Trump, however, isn’t backing away from the idea. Trump would be taking a political risk if he does allow most government functions to lapse on Oct. 1 – the first day of the new budget year – roughly a month before the Nov. 6 elections, when Republican control of both the House and Senate is at stake.

MORNING MARKETS

World stocks dip before central bank test

World stocks fell and the U.S. dollar steadied on Monday as a busy week of central bank meetings and company updates started. The U.S. Federal Reserve makes its next policy decision Wednesday and most analysts expect the central bank to hold steady. Decisions are also due from the Bank of Japan and the Bank of England later in the week. In Europe, markets started the week on a down note. Britain’s FTSE 100 was off 0.34 per cent just before 6 a.m. ET. Germany’s DAX fell 0.27 per cent and France’s CAC 40 slid 0.38 per cent. In Asia, stocks were also weaker. Japan’s Nikkei finished down 0.74 per cent. The Shanghai Composite Index ended down 0.12 per cent and Hong Kong’s Hang Seng finished off 0.25 per cent. Wall Street futures were lower. The Canadian dollar was trading at 76.58 US cents.

WHAT EVERYONE’S TALKING ABOUT

‘Emoluments’ clause of U.S. Constitution could be Trump’s undoing

“A brewing threat facing the presidency of Donald Trump may be one that stirs hardly any notice in the roiling waters of Washington: a quietly developing federal court battle that will shed light on whether Mr. Trump unconstitutionally benefited from foreign and domestic interests through his Washington hotel.” – David Shribman

Premier Ford and Prime Minister Trudeau stake out their turf for a year of culture wars

“In one day last week, two notable political balloons were floated in Canadian politics: In Toronto, Doug Ford’s new Tory government in Ontario is planning to let cannabis be sold at private stores and, in Ottawa, Justin Trudeau is considering banning handguns. A year of culture wars is coming to Canadian politics.” – Campbell Clark

The high cost of NATO’s dwindling peace dividend

“The President’s antipathy toward his NATO allies – his instincts to shift the United States to a more inward-looking, self-interested and increasingly isolated superpower, while openly courting a powerful traditional foe in Russia – has deep economic implications, in addition to the military and political ones.” – David Parkinson

Canada is lighting the way on cannabis regulation – so we need to get it right

“The prohibition of cannabis has caused significant harm, and this is a once-in-a-lifetime opportunity to reverse 100 years of failed policy. … Russia, China and the United States are dead set against legalization; we need to have an unimpeachable record post-legalization if we’re to be the vanguard of a long overdue reform to how the world deals with cannabis.” – Daniel Bear, a professor of criminal justice at the School of Social and Community Services, Humber Institute of Technology and Advanced Learning (for subscribers).

LIVING BETTER

The next hot trend in fitness? Recovery

Smart lifters know that gains happen outside the gym. Rest and recovery is when the body can adapt to the stress associated with exercise, replenish muscle glycogen (energy stores) and repair body tissue, building larger muscles. While many may hit the couch for a little rest and relaxation, facilities such as New York’s ReCover, offer services aimed at enhancing the body’s innate healing response: hydromassage, zonal air compression treatments, CVAC atmospheric pressure system and infrared sauna. But even without boutique recovery centres, there’s plenty you can do either at home or with the help of trained professionals to maximize your recovery.

MOMENT IN TIME

July 30, 1976: No amount of rain could bring down these butterflies. A “torrential” downpour delayed the start of the 1976 Caribana parade – part of the 10th annual Caribbean festival held in Toronto – but as captured by Globe photographer James Lewcun, participants eventually marched and danced ahead anyway. That Saturday in late July, overcast skies were no match for the music and celebration that the parade has been bringing to the city since 1967. Today, the festival’s biggest event draws in millions to watch the procession of floats, enjoy the blasting reggae, calypso and dancehall, and more. – Jacqueline Houston

source:-theglobeandmail.