By: Mason Mattu, SFU Student
Every time I hear a Canadian bring up the upcoming US presidential election in conversation, another person will retort with “Ugh, can we not talk about that?” or “Why should I care about what happens?” Well, you should care. A potential second Trump presidency is absolutely a threat to the stability of the Canadian economy and the diplomatic relationship between the US and Canada.
Each day, “$3.6 billion worth of goods and services” move across the US-Canadian border. Our trading relationship is one of the most solidified in the world in regards to mutual respect, interest, and collaboration. However, it hasn’t always been this way. Let’s turn our clocks back to 1971, just for a second. Then American president Richard Nixon had imposed a 10% surcharge on all exports coming from Canada to the US. This had significantly strained our trade and diplomatic relationships. This “only lasted four months” before a repeal in policy, but experts say that an even longer stint of protectionist policies from a future Trump administration could impact the Canadian economy significantly.
Presidential candidate Donald Trump has a plan for a 10% blanket tariff on imports from every country, excluding China, where he plans to issue a 60% tariff. Tariffs are taxes imposed on imports from foreign countries, encouraging buyers to purchase from domestic companies. This 10% blanket increase would bring our trade and diplomatic relationship back to the age of Nixon, where in just four months, Canada saw a “2.6% reduction in total imports” to the US. Now imagine what four years of a Trump administration would do to our economy. It is projected that with the immediate implementation of tariffs, “0.4% of Canada’s economy would disappear immediately” and “employment would fall nearly 0.75%.” That’s because “it’s estimated nearly 2.4 million Canadian jobs are tied to Canadian exports to the US.” Not only would these tariffs be disastrous for jobs, they also will increase inflation, interest rates, and the cost of products. We’ve got to remember that these are not just percentage points, this impacts real people.
Some economists suggest these effects would be temporary due to Trump wanting to use our economy as leverage for a more protectionist version of the free-trade United States-Mexico-Canada Agreement. This agreement aims to “support mutually beneficial trade leading to freer markets, fairer trade, and robust economic growth in North America.” A similar situation was seen in 2019, when Trump lifted hefty tariffs on Canadian aluminum and steel after negotiations with Canada. These tariffs had a limited impact on Canadians as they were commodity-specific, unlike Trump’s new blanket tariff plan. Even if these measures are temporary like in 2019, we cannot let our economy be used as poker chips in Trump’s protectionist schemes.
While the Biden administration has implemented some protectionist policies against Canada, the trade relationship has maintained a healthy dynamic without any major disruptions. President Joe Biden did implement a “buy American” policy, one that encouraged domestic purchasing and production. This policy enacted in 2021 impacted only the lumber and aluminum industries. Still, Biden requires exemptions to tariffs when “buying American costs 25% more or hurts public interest.” This would not be seen under Trump’s outrageous plan to impose tariffs on all of Canadian industry. Prime Minister Justin Trudeau has worked with Biden to promote “bi-lateral cooperation on critical minerals, semiconductors, and clean energy.”
Presidential candidate Kamala Harris will continue Biden’s stance on their relationship between the US and Canada, stating that she is against Trump’s blanket tariff policy. More collaboration needs to be facilitated between American and Canadian businesses to continue fostering growth in partnership before potential tariffs could kick in. Canada’s domestic political landscape is also up in the air, so it is imperative that we focus on collaborative solutions between political parties to this crisis to plan in advance.
So yes, my fellow Canadians, you ought to care about the upcoming US presidential election. We are, after all, impacted by this. Four years under another Trump administration will leave us with economic uncertainty, worsening our current economic crisis.
