‘Canada will continue to thrive,’ no matter who wins in U.S., Freeland says

6 hours agoDuration1:31Deputy Prime Minister and Finance Minister Chrystia Freeland, speaking a day ahead of the presidential election, urged Canadians to remember that the U.S. depends on Canada in ‘really significant ways’ and stressed that the federal government is ‘absolutely confident’ it will be able to work with whoever Americans elect.

If Trump wins again, experts agree he almost certainly will revive disputes over Canada-U.S. trade — an issue that’s been largely dormant over the past four years, with President Joe Biden in the White House.

While there has been some squabbling over the longstanding softwood lumber dispute (new window), U.S. tax credits for American-made electric vehicles (new window) and Biden’s first-day decision to rescind Keystone XL oil pipeline permits (new window), the Canada-U.S. relationship has been relatively harmonious with Biden in office.

That could come to an abrupt end if Trump wins. His election platform is again blasting out messages about unfair trade deals and blind faith in the siren song of globalism.

Laura Dawson is a Canada-U.S. relations expert and the executive director of the Future Borders Coalition.

A Trump victory gives Canadians pause, it gives Canadians reason for concern. We have a pretty good idea of where the Trump team will be going on issues affecting Canada and none of them are very good, she said.

Trump’s promise on tariffs

Trump is promising a minimum 10 per cent tariff on all imports — a potentially disruptive development for Canadian businesses and the workers they employ, given that an estimated $3.6 billion in goods cross the border every day. Researchers say such a tariff would shave billions of dollars off Canada’s GDP (new window).

The word ‘tariff’ properly used is a beautiful word. One of the most beautiful words I’ve ever heard — it’s music to my ears, Trump told a recent rally in Savannah, Ga., where he laid out his economic agenda.

If you don’t make your product here, then you will have to pay a tariff, a substantial tariff when you send your product into the United States, he said, framing the tax on imports as a way to get more things made in America.

Speaking to CBC’s Power & Politics on Monday, Canada’s Ambassador to the U.S. Kirsten Hillman said the Canada–United States–Mexico Agreement (CUSMA) on trade should, in theory, exempt Canada from Trump’s tariffs. She acknowledged he could push ahead with them anyway.

It could be a repeat of Trump’s first-term tariffs on steel and aluminum, which were applied on Canadian exports despite the old NAFTA being in place at the time.

Those tariffs damaged Canada’s economy. They were ultimately lifted after officials here retaliated by matching them dollar-for-dollar with tariffs on some U.S. exports.

Hillman said Canada is prepared to retaliate again if Trump slaps a tariff on our goods. Officials in the European Union have said the same (new window). The result could be a trade war between the U.S. and some of its closest allies.

I think Canada has to be ready, ready to stand up for ourselves, Hillman said.

We have laid the groundwork very, very well among some of Trump’s biggest supporters and biggest allies, why it doesn’t make sense to apply that policy to Canada. But we’ll have to have that discussion with him should he win.

Part of Canada’s message to Trump is that the new NAFTA has been a success, with record-breaking two-way trade (new window) since the renegotiated deal was signed, Hillman said.

Let’s build on the success we had with the last Trump administration should he regain the White House, she said.

While it has been a success, the Canada-U.S.-Mexico trade agreement is up for a review in 2026. Craft said Trump is intent on making some changes to the trilateral trade deal.

We’re going to go back to this dispute, Craft said, suggesting there could be a fight over auto parts after the U.S. lost a trade dispute (new window) with Canada and Mexico on the issue.

Trump has also repeatedly taken aim at Canada’s own protectionism. He’s condemned the supply management system that shields Canada’s dairy, egg and poultry sectors from outside competition as deeply unfair to American farmers.

Canada stood firm on the issue in the last trade talks and the Trudeau government recently endorsed a Bloc Québécois private member’s bill that would exempt these supply-managed sectors from all future trade negotiations.

But that doesn’t mean Trump won’t revive his efforts to kill off supply management, or push for painful concessions elsewhere if Canada won’t budge.

In the next round of negotiations, the U.S. is certain to revisit this by either demanding stricter enforcement of their current deal or requesting that the system be scrapped altogether, TD Bank said in a recent note to clients (new window) on the issue.

With so much uncertainty looming, Canada has been preparing for a second Trump presidency for months. Prime Minister Justin Trudeau appointed Industry Minister François-Philippe Champagne and International Trade Minister Mary Ng as his envoys on Canada-U.S. relations.

Those two ministers, along with Hillman, have visited dozens of states and met with lawmakers of every political stripe to remind Americans of the importance of Canada to the U.S. and to build up an alliance of sorts against protectionism.

The ministers have said this Team Canada approach of continually meeting with a bipartisan group of American federal, state and local officials has prepared Canada for any eventuality.

Ottawa braces for U.S. election results

Regardless of who wins the U.S. presidential election, the federal government has its eye on how the new administration will impact trade between Canada and the U.S., including broad tariffs if Donald Trump returns to office.

This trading relationship is enormously important — it’s worth $3 billion a day. Millions of Canadian and American jobs depend on it, Ng said in an interview Sunday.

We have stood firm with Canadian businesses and workers in the past. We will continue to do that, she added when asked about Trump’s trade threats. Our defence of Canada and Canadian businesses is not going to be any different now.

While much of the focus is on what Trump’s return could mean for Canada, a Kamala Harris victory could also present some challenges.

She was just one of 10 U.S. senators to vote against the new NAFTA — she said it didn’t go far enough on climate change — and she also has promised to review the deal if elected.

Migrant crisis and military spending

Beyond trade, Craft said Trump will also want more help from Canada on the migrant crisis unfolding at the U.S. southern border.

She offered no specifics on what Trump might want out of Canada on the issue but suggested his vow to carry out the largest deportation in U.S. history could have reverberations.

We’re going to be shutting down our border — they’ll be coming through yours, she said.

At the NATO summit earlier this year, Trudeau vowed to meet the defence pact’s spending targets (new window), which Canada has long ignored. Trudeau said Canada will spend two per cent of its GDP on the military by 2032.

But Craft said that’s not soon enough and she expects Trump will demand more spending on a faster timeline.

She said the two per cent of GDP target may already be outdated, given that other Western countries are pledging more than that as the world grapples with wars in Ukraine and the Middle East.

We will be the best friend you’ve ever had if you get your house in order, Craft said.

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