Understanding the Risks of U.S. Election Results on Canadian Trade and Economy
As the 2024 U.S. election draws nearer, Canadians are closely watching the potential impact of the outcome on their economy, especially in terms of trade relations. The stakes are high, particularly when considering that over 70% of Canada's exports are directed toward the United States. With the election being a tight race between incumbent Donald Trump and Vice President Kamala Harris, Canada’s former Ambassador to the U.S., David MacNaughton, has weighed in on the risks both candidates present to Canada's economic future.
MacNaughton, who played a key role in Canada's response to Trump’s presidency, highlighted that the shift toward protectionism in both the Republican and Democratic parties has significant consequences. For Canada, the potential for increased tariffs, trade restrictions, or a "thickening" of the U.S.-Canada border could substantially harm its economy. With much of the Canadian economy tied to the U.S., any shift toward protectionism could strain this essential trade relationship.
Also Read:- Understanding Swing States: The Crucial Role They Play in Elections
- Discover the Hilarious Insights of "Question Everything" on ABC iview
When asked about the differences between Trump and Harris, MacNaughton said Trump is very "transactional," meaning he views trade deals and tariffs through the lens of personal and political gain. Trump's administration already renegotiated the NAFTA agreement, now the USMCA, and while he originally called for dismantling NAFTA, he might find it politically difficult to attack the new deal directly. In contrast, Kamala Harris is viewed as more ideologically protectionist. Her opposition to the USMCA and her appeal to organized labor could create different challenges for Canada if she takes office.
Looking toward 2026, when the USMCA comes up for review, both Trump and Harris are likely to demand Canada align more closely with the U.S. on issues such as security, defense, and the prevention of Chinese imports. MacNaughton believes that if Canada fails to match U.S. policies, particularly regarding electric vehicles and Chinese products, the trade relationship could suffer.
Despite concerns over tariffs, there is a belief that Trump’s threats may be exaggerated, as the USMCA does provide Canada with some protection. However, MacNaughton points out that political rhetoric often differs from actual policy. He warns that regardless of what is said on the campaign trail, Canada must prepare for a future where trade and defense are deeply intertwined. By focusing on areas of mutual interest, such as military and security cooperation, Canada may be able to mitigate some of the trade risks, even under a protectionist administration.
In either scenario—whether Trump or Harris wins—the advice remains consistent for Canadian policymakers: be prepared to engage actively with U.S. stakeholders and be flexible in addressing emerging challenges. The relationship between Canada and the U.S. is integral, and maintaining that connection, especially during uncertain political times, will be key to safeguarding Canada’s economic interests.
Read More:
0 Comments