A supporter of Republican presidential candidate and former U.S. President Donald Trump attends Day 1 of the Republican National Convention at the Fiserv Forum in Milwaukee, on July 15.Cheney Orr/Reuters
At once-and-future U.S. president Donald Trump’s rally in rural Pennsylvania on Saturday, the crowd of supporters behind him was carrying and wearing all kinds of signs. There were “Trump 2024″ and “Joe Biden You’re Fired” posters. There was a sea of “Make America Great Again” hats. One woman had a bright teal shirt that read “Mean Tweets 2024.”
And then there was the guy with this on his T-shirt: “Trump 2024. It Ain’t A Mistake Snowflake.”
He wasn’t talking to Canada, but he might as well have been.
Unless President Joe Biden finds his fountain of youth, Mr. Trump is going to win the November U.S. presidential election. His Republican Party – and it’s now his party – is also likely to control both houses of Congress.
A second Trump presidency spells big trouble for Canada. Here’s my list of potential problems to expect, in escalating order of seriousness.
Defence spending: The Trump Republican platform contains a promise to “ensur[e] that our allies must meet their obligations to invest in our common defence.”
Every NATO member has pledged to spend at least 2 per cent of gross domestic product on defence, and last week Prime Minister Justin Trudeau, under pressure from impatient allies, announced that Canada will get there – in 2032. There’s no plan, it’s just a press release. Under a second Trump presidency, that’s not likely to cut it.
Getting Canada to the 2-per-cent target by next year would mean an extra 0.6 per cent of GDP for the military – or roughly $20-billion. On a $3-trillion economy, that’s easily doable.
But an extra $20-billion, year after year, means bigger deficits, or spending cuts, or new taxes. And don’t be surprised if a second Trump administration decides that the 2 per cent target – which 23 of 32 NATO members will meet in 2024 – is too low.
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Green anything: The phrase “DRILL, BABY, DRILL,” in all-caps, appears in the GOP platform. So does a promise to terminate “the Socialist Green New Deal.” A Trump administration will seek to raise U.S. oil and gas production, end clean-energy subsidies and cut emission-limiting regulations.
In other words, Republicans are promising to lower the price of pollution. Canada’s policy is to discourage pollution, by raising its price. To the extent that our largest trading partner makes it cheaper to operate high-carbon industries – think everything from oil and gas to steel and cement – Canada will be under pressure to lower our price and regulations on pollution, lest those industries shift operations and investments south.
Taxes: Mr. Trump brought in big taxes cuts (paid for by big deficits) last time around, particularly for high earners and business. That aimed to encourage businesses to move operations to the U.S., whether through actual investments or earnings-shifting paper transactions.
Another dose of tax cuts is likely from a second Trump administration. Lower taxes on business would be an incentive for Canadian business, and overseas firms thinking of setting up shop here, to consider sending production and investment to the U.S. Depending on what Washington does, Ottawa and the provinces may need to craft an aggressive response.
The border: Mr. Trump’s platform says “we must deport the millions of illegal Migrants who Joe Biden has deliberately encouraged to invade our Country.” That includes more than 10 million people living in the U.S. illegally, many of whom have been there for years or decades. It may also include millions of asylum claimants, most still awaiting a refugee hearing.
To what extent a Trump administration would follow through is unclear. But any action could encourage large numbers of people to pick up and walk across the Canadian border. A repeat of Roxham Road – when tens of thousands of people made refugee claims by walking across the New York-Quebec border – only this time possibly on a far larger scale, has to be planned for.
Trade: The USMCA free-trade treaty must be reopened in 2026, and Mr. Trump has also talked about imposing a 10-per-cent tariff on all U.S. imports. The U.S. is by far our largest trading partner, so any limitations on cross-border trade will hit us very hard.
Rust Belt voters get riled up by mention of China or Mexico, not Canada, yet we risk ending up as collateral damage from U.S. protectionism.
For Canada, trade with the U.S. – both imports and exports – is economically existential.
Truth: Policy Horizons Canada, a think tank inside the federal government, recently put out a report on “potential disruptions” facing the country. It lists the usual dangers, from pandemics to war.
But the top threat, classed as both high-impact and high-likelihood, is this: “People cannot tell what is true and what is false.”
The report described the looming possibility of a world where “the information ecosystem is flooded with human- and artificial intelligence-generated content,” such that “mis- and disinformation make it almost impossible to know what is fake or real,” and “what or who to trust.”
That could be the biggest impact on Canada of an increasingly polarized, radicalized and just plain angry American politics. We are immersed in American culture, and the border can’t stop the vapours. It’s like sleeping in the same room as someone with a contagious disease. Good luck not catching it.