Canadian Trade’s Resilience Under Trump: Preparing for Another Term of Challenges
As Donald Trump embarks on another potential term in the White House, Canadian industries are preparing for what could be a replay of past trade battles. The specter of new tariffs, trade tensions, and potential policy shifts are pushing Canadian businesses to brace for impact. However, those who managed to navigate the unpredictable trade environment of Trump’s first term believe that their experience and strategic resilience may prove invaluable in surviving another round.
Reflecting on Past Challenges: A Trade War History
The memory of the 2018 trade war looms large in the minds of Canadian trade officials and industry leaders. Catherine Cobden, president and CEO of the Canadian Steel Producers Association, recalls the difficult battle against Trump’s 25 percent tariffs on steel imports. The tariffs, introduced to support American steelmakers, initially targeted Canada despite the countries’ longstanding trade relationship. But Canadian negotiators successfully secured an exemption for Canada, one of the only countries to do so.
Cobden views the exemption as a testament to Canada’s diplomatic strategy and the interconnected nature of North American trade. “We have that history and experience to draw on,” she explains. “The reason we determined that tariffs should not exist between Canada and the United States is that we learned they were doing harm on both sides of the border.” Since then, Canada has implemented protective measures, including new rules to better identify the origins of steel imports, which Cobden believes reinforce the mutual benefits of Canadian and U.S. trade cooperation.
Leveraging Economic Ties in Automotive Manufacturing
Canada’s automotive industry was another front line during Trump’s first term, when trade tensions put North American Free Trade Agreement (NAFTA) renegotiations in the spotlight. Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association, was heavily involved in these talks. Trump had initially aimed to complete the renegotiation within six or seven weeks, but the process extended to 13 months.
Volpe’s approach focused on underscoring the deeply integrated supply chain between Canada and the U.S. automotive industries. With half of the vehicles produced in Canada manufactured by U.S.-based companies, and roughly 50 percent of parts sourced from American suppliers, he emphasized that severing these ties would damage both economies. “We managed to show them that their interests were better served with us than any other partner that they have,” Volpe said, reflecting on the success of this strategy.
The Agricultural Sector: Farmers Facing Potential Tariffs
The agricultural sector, particularly grain farmers, is another area of concern. With the U.S. as Canada’s largest grain export market, the possibility of tariffs could have a significant impact on the industry. Kyle Larkin, executive director of the Grain Growers Association of Canada, warns that any disruption to trade with the U.S. will hit hard, affecting the livelihoods of Canada’s 65,000 grain farmers across the country.
China, Canada’s second-largest grain export market, has already been the target of steep tariffs from Canadian officials, aimed at balancing trade relations. But with the U.S. as Canada’s largest export destination, new tariffs on Canadian grain could disrupt years of stable trade. Larkin remains cautious, emphasizing the urgency of maintaining open channels with the U.S. to safeguard Canadian farmers.
Preparing for Future Trade Obstacles
As the potential second Trump presidency looms, Canadian industries are working proactively to reinforce their trade positions. Key measures include leveraging the past successes of Canada’s diplomatic exemptions, reinforcing cross-border trade ties, and addressing specific industry vulnerabilities. The steel and automotive sectors, for example, are fortifying alliances and building resilience through compliance with new import regulations and transparent supply chain practices, which signal the commitment of Canadian industries to fair trade.
Cobden of the Canadian Steel Producers Association sees this as an opportunity to remind U.S. policymakers of the importance of trade synergy between the two countries. “I’m not going to say I’m hopeful because there’s a bunch of uncertainty. But I do feel like we have an opportunity to take the good work we’ve done and stand up and be united with the United States,” she said, expressing a cautious optimism grounded in Canada’s historical resilience.
Conclusion: Building on a Strong Foundation of Resilience
With the Canadian economy so tightly interwoven with the U.S., Canadian trade officials and industry leaders recognize the critical need to defend and adapt their strategies amid unpredictable trade policies. The lessons learned from the previous Trump term—such as securing exemptions and advocating for mutual economic benefits—equip Canada with a unique advantage as it braces for future obstacles.
Ultimately, while another Trump presidency poses considerable challenges, Canada’s trade history with the U.S. has demonstrated a resilience that extends across industries. With proven strategies, proactive measures, and a focus on diplomatic negotiation, Canadian industries are better prepared to withstand the uncertainties of the global trade environment, regardless of the obstacles ahead.
Source : The Canadian Press
