Canada Rallies Against US Tariffs, Indonesia Seeks to Set Nickel Prices, Europe Tightens Its Wallet

The Trump administration imposed 50% tariffs on Canadian steel and aluminum, then expanded the tariffs to cover wine, furniture, dairy, and other goods. Canada has responded by announcing retaliatory tariffs on American products.

In a survey, 76% of respondents said walking away from the negotiating table was the right decision. Only 9% viewed the US as a trustworthy ally, and in Quebec, favorable views of President Trump stayed below 10%.

Even opposition parties, including the Conservatives, have spoken with one voice alongside the government, showing Canadians coming together behind the nation against an outside adversary.

As tensions between Canada and the US have grown since the Trump administration came to power, the long-running internal conflict over Quebec independence has been overshadowed by the larger Canada-versus-US confrontation. As a result, support for Quebec independence has fallen to around 30%, its lowest level in decades.

Canadian provinces control liquor distribution and sales, and when the US imposed tariffs on Canadian goods last year, most provinces pulled American wine and whisky from store shelves. 60% of Canadians said they had no intention of buying American alcohol.

The 'Buy Canada' movement, which urges people to purchase Canadian-made products, has gained momentum. Shoppers are choosing Canadian food over American products, stores increasingly display prominent Canadian-product labels, and some travelers are switching from trips to the US to domestic destinations.

Under President Prabowo, however, it is pushing to restructure how commodity prices are set, aiming to gain pricing power through the launch of a strategic minerals and commodities exchange in January next year.

The Indonesian government is taking a hard line on strengthening its control over raw material prices. In a speech to parliament, President Prabowo said, "If you don't want to pay the price we set, then don't buy," signaling an expanded state role not only in nickel but also in major commodities such as palm oil, coal, and copper.

According to the US Geological Survey, Indonesia has the world's largest nickel reserves at 55 million tons. In 2023 it accounted for 1.8 million tons of global output of 3.6 million tons, roughly 50%, and in 2024 its share surpassed 62%, showing continued growth.

Using the state agency DSI, it intends to strengthen audits of commodity exports and block companies from evading taxes and royalties by declaring artificially low prices.

Securing pricing power would mean more than simply raising nickel prices. Indonesia expects that gaining control over prices would increase state revenue, stabilize the rupiah's value, and strengthen its bargaining position within global supply chains.

Indonesia's effort to gain pricing power through an exchange faces limits and challenges. International benchmark prices are not created by government declaration alone; Indonesia must overcome the influence of existing systems such as the London Metal Exchange. Success hinges on liquidity and trust, meaning active real trading with participation from global producers, traders, and financial firms. As the 2023 palm oil exchange case showed, low trading volume can become a problem.

China is often cited as a successful example of expanding influence in commodity markets, having grown its own exchanges on the strength of its raw material consumption. But China and Indonesia start from opposite positions. China, the world's largest commodity consumer, moved to address its grievances, whereas Indonesia, the largest producer, is seeking pricing power.

That means households saved roughly 14.3% of disposable income, about 2 percentage points above the 12.5% pre-COVID five-year average. According to a Financial Times analysis, savings rates rose in 14 of 18 European countries.

The main driver of rising European household savings is economic uncertainty stemming from repeated crises. Over the past few years, Europeans have endured the COVID-19 pandemic, Russia's invasion of Ukraine, soaring energy prices, and renewed inflation. Rather than spending, people have increasingly built emergency funds out of anxiety about the future. Analysts see psychological insecurity about the future as a bigger cause than weakness in the job market.

When all households increase savings at the same time, the 'paradox of thrift' emerges. Falling household spending leads to lower corporate sales, which in turn cuts investment and employment and slows economic growth. The IMF forecasts US growth at 2.3% this year, while it projects the eurozone at a much lower 0.9%.

The United States and Europe show a large difference in consumer behavior, closely tied to how they hold assets. In the US, more than half of households invest in stocks, so when share prices rise, a so-called 'wealth effect' boosts spending on cars, travel, and more. In Europe, only about one in ten households hold stocks, making it hard to feel the wealth effect from rising share prices. Even as wages recover, European consumption remains below its pre-COVID trend.

The savings accumulated in European households hold the potential to become spending power. These savings are not the result of lacking money but of economic anxiety that keeps people from spending. Analysts are cautiously optimistic that if prices and energy costs stabilize and the economic outlook improves, these savings could quickly turn into spending on travel, dining out, and cars.