As the American election approaches, the message to Canadians from both the U.S. ambassador in Ottawa and our ambassador in Washington is that there’s no need to panic.
There’s some dread in the air because trade is the most critical issue in bilateral relations, and Donald Trump is sounding even more protectionist than he was in his first go-round. If Mr. Trump returns to power, he’s talked of putting up a 10-per-cent tariff across the board.
But the Justin Trudeau and Trump governments renegotiated NAFTA and Mr. Trump, in his typical hyperbolic way, has said it’s the best deal ever. So even though the current USMCA agreement is up for review in 2026, it would be illogical, even for him, to tear it up. Some changes may be made, but he is more likely to take out his protectionist passions on other countries.
“There’s no groundswell to get rid of the USMCA and throw it out and start all over again,” said U.S. ambassador to Canada David Cohen.
Canadian ambassador to the U.S. Kirsten Hillman, while acknowledging Democrats as well as Republicans are now more protectionist, echoed Mr. Cohen’s view. “I don’t think we have any reason to be concerned under, to be frank, either administration,” she said at a cabinet retreat of the Trudeau government in Halifax.
In an impressive lobbying effort, Ms. Hillman and a group of cabinet members and other officials have visited 33 states and met with 42 governors since January to underscore the importance of the trade deal to the stability of the respective economies.
It should be remembered that if Mr. Trump returns to power, the Trudeau government has four years of experience in dealing with him. They fared not too badly. Should Conservative Leader Pierre Poilievre become prime minister, his populist credentials could well serve to make relations easier with a Trump White House.
Rather than trouble for Canadian trade, a case can be made that Ottawa will benefit from Mr. Trump’s ill-advised protectionism. New tariffs he imposes on others could result in more trade with Canada to make up the shortfall.
In respect to China, Ottawa has lumped itself in with Washington with its decision to impose tariffs on Chinese electric vehicles. It led to retaliation this week in the form of Beijing launching an anti-dumping investigation into Canadian canola.
The move by the Trudeau government had the look of pure politics – playing for votes in Ontario and Quebec – as opposed to longer-term economic, environmental and geopolitical interests. In response to election meddling and other muscle-flexing transgressions by the Xi government, the hard line on auto imports was deemed necessary.
The move will no doubt go over well in Washington with both Republicans and Democrats.
Mr. Cohen says that while there’s a lot of concern over the Canada-U.S. trade pact trade north of the border, it’s barely on the radar screen in Washington.
Problems of perception result, he observed, because Canadians are consuming too much American political news. It’s “unhealthy” in his view, because the biases in the reporting of American cable channels can leave wrong impressions.
But what, other than huge interest, does he expect when there’s a good chance that Donald Trump, whose nationalism and egotism sound like they’re bordering on fascism, could return to power?
In the current presidential campaign, Canada has barely been mentioned, which is normally the case in U.S. elections. If the talk moves to foreign affairs, maybe we’ll be cited in the context of our much-ballyhooed and overblown failure to spend two per cent of our GDP on defence.
How much sense does it make that budget totals are such a controversial issue when the U.S. already outspends its biggest rival, China, on defence by an enormous count of roughly four to one? And when the combined spending of NATO countries on defence is more than a trillion dollars more than their adversaries?
In the grand global scheme of things, a few billion more from Canada is not even a pittance.
But on defence, we at least have an option: we can spend more to shut up the grumblers. On trade, there is no option. Since the days of John Diefenbaker, we’ve tried countless times to diversify to other countries to reduce our reliance on America.
It has never worked. We’re cocooned on the continent. We’ll be reliant on the U.S., even if it takes a fascist turn.