ottawa –
Donald Trump’s mandate to get tough on trade is expected to grow stronger in his second term as U.S. president, posing different challenges for Canada than in his first four years in the White House.
Finance Minister Chrystia Freeland on Wednesday predicted post-election calm and reassured the Canadian government that it is ready to work with the Trump administration again.
But Goldie Heider, president of the Business Council of Canada, warns that the past may not provide a good roadmap for dealing with Trump’s second term as president.
He said the president-elect has strong support from the American people for his tough trade policies, including a pledge to impose tariffs of 10% to 20% on all goods entering the United States.
Hyder says that if Canada wants to convince the U.S. that it is a reliable economic partner worthy of a carve-out, things like summer rail shutdowns and recently announced emissions limits for the oil and gas sector won’t help. said.
“America is concerned about its economic security and national security, and it’s making a list of its friends and enemies and everything in between. And we want to make sure we’re not near the top. You have to make sure you’re on top of your friends list,” Haider said.
Freeland highlighted Wednesday that Canada reached a renegotiated free trade agreement with the United States during President Trump’s tenure. He added that the federal government shares President Trump’s concerns about China’s overcapacity.
Hyder said it’s important to emphasize shared priorities, but it’s not enough for the Trump administration to overlook issues such as the Liberals’ digital services tax on tech giants that earn revenue in Canada.
“The other irritants I mentioned will also come to their attention, and I’m thinking more seriously, especially about defense,” he said, adding that increasing defense spending is fueling war. America’s anger was that it pointed out that this was “what we should do” to avoid this.
Last February, President Trump said he would not defend NATO countries that are not spending agreed defense spending and urged Russia to do “whatever they want” to those countries. He suggested that he intended to do so.
The Canada-U.S.-Mexico Agreement, which replaced NAFTA and was negotiated during President Trump’s first term, is also scheduled for review in 2026, and President Trump has vowed to renegotiate it.
Stephen Tapp, chief economist at the Canadian Chamber of Commerce, said President Trump is likely to take a more aggressive stance in trade negotiations this time around.
“The customs guys are back,” Tapp said. “This is going to be scary for Canadian exporters, and it’s probably going to leave Canadian policymakers wondering how to deal with President Trump’s second term.”
Mr Tapp said businesses were planning for a variety of scenarios and it was a “duty” for governments to do the same.
A report written by Trevor Tombe, an economics professor at the University of Calgary, for the Chamber of Commerce found that if the U.S. imposed a 10% tariff on top of retaliatory tariffs from other countries, Canadians would pay an average of $1,100 in illegal taxes each year. We estimate that we will lose income.
Just over 24 hours after Mr. Trump declared victory, Prime Minister Trudeau reinstated a key cabinet committee on Canada-U.S. relations and appointed Mr. Freeland to chair it.
Freeland led negotiations on the new North American Free Trade Agreement, signed during President Trump’s first term.
Trade Minister Mary Ng said Thursday that the Canadian government has heard from U.S. companies concerned that tariffs would hurt them too.
“We believe these American companies will share views with the new administration,” Ng said.
“Our commitment to Canadian businesses here has seen us always stand up for Canadian interests and always stand up for Canadian workers. That doesn’t change.”
This report by The Canadian Press was first published Nov. 7, 2024.
