From trade to migration to defence spending, a high-pressure year ahead with incoming U.S. administration
CBC News · Posted: Nov 06, 2024
Donald Trump's presidential win could wreak havoc on global economies through the use of tariffs. (Brian Snyder/Reuters)
Canada, prepare for the big squeeze. A new Trump administration is likely to press this country on sensitive fronts: trade, migration and military spending.
The reverberations of Donald Trump's election win will ripple internationally with his plan for sweeping tariffs, mass deportation of migrants and intense pressure on countries to spend more on their own defence.
The animating principle of Trump's political career is that the U.S. must get tough with allies who have grown too reliant on it, economically and militarily.
And few are as reliant as Canada, as illustrated in a Washington think-tank report that said the northern neighbour risks being among the countries hardest hit by Trump's plan for a minimum 10 per cent global tariff.
The still-undefined details of his plan have provoked a gamut of estimates about the potential damage to Canada's economy, ranging from less than a half per cent of GDP to an eye-watering five per cent.
Trump has made clear his intention to impose a minimum 10 per cent fee on all imported products, memorably calling "tariff" the "most beautiful word in the dictionary."
Canada braces for Trump 2.0 as the former president takes the lead in U.S. presidential raceTrudeau congratulates Trump on 'decisive' victory
Canadian officials have spent months seeking clarity from Trump associates on whether the country might be exempted; they received no assurances.
Canada, prepare for the big squeeze. A new Trump administration is likely to press this country on sensitive fronts: trade, migration and military spending.
The reverberations of Donald Trump's election win will ripple internationally with his plan for sweeping tariffs, mass deportation of migrants and intense pressure on countries to spend more on their own defence.
The animating principle of Trump's political career is that the U.S. must get tough with allies who have grown too reliant on it, economically and militarily.
And few are as reliant as Canada, as illustrated in a Washington think-tank report that said the northern neighbour risks being among the countries hardest hit by Trump's plan for a minimum 10 per cent global tariff.
The still-undefined details of his plan have provoked a gamut of estimates about the potential damage to Canada's economy, ranging from less than a half per cent of GDP to an eye-watering five per cent.
Trump has made clear his intention to impose a minimum 10 per cent fee on all imported products, memorably calling "tariff" the "most beautiful word in the dictionary."
Canada braces for Trump 2.0 as the former president takes the lead in U.S. presidential raceTrudeau congratulates Trump on 'decisive' victory
Canadian officials have spent months seeking clarity from Trump associates on whether the country might be exempted; they received no assurances.
Donald Trump is seen with Prime Minister Justin Trudeau at a NATO round table meeting in December 2019.
(Frank Augstein/AP Photo)
One scenario some trade-watchers envisioned is that Trump will swiftly announce tariffs on everything early next year, then use them as leverage to force other countries to reorient certain policies.
In other words, Canada faces an intense year ahead in bilateral relations.
A sense of déja vu
In an effort to set a positive tone on Wednesday, Prime Minister Justin Trudeau congratulated Trump on his victory and called the friendship between Canada the U.S. the envy of the world.
"I know President Trump and I will work together to create more opportunity, prosperity and security for both of our nations," Trudeau said.
But for Canadian veterans of the trade battles with the first Trump administration, there is a sense of déja vu.
"Welcome back to an administration that put national security tariffs on the Canadian aluminum that its own military buys to make a point no one understood," said Flavio Volpe, head of Canada's auto-parts lobby association, referring to Trump's past tariffs on Canadian steel and aluminum.What impact will the U.S. election have on Canadian politics? That is the topic of our Ask Me Anything segment this week on Cross Country Checkup. Leave your question here and we may read it on the Nov. 10 show
Volpe held out hope that Canada's co-operation with the U.S. to keep out Chinese imports might create common ground between the two countries.
But the big change from Trump's first term is that he's now talking about placing tariffs on everything, from everywhere, describing the move as a strategy to force manufacturers to build in the U.S.
WATCH | Donald Trump tells supporters he 'made history', as he declares election victory:
Donald Trump claims a 'magnificent victory' after winning several key battleground states, including Pennsylvania, and tells supporters they are a part of the 'greatest political movement of all time.'
It's believed Ottawa will try negotiating exemptions to the tariff, and failing that, will threaten retaliation. Canada's ambassador to Washington has already mused publicly about the possibility of a response.
This in turn risks plunging Canada into a painful trade war with its powerful neighbour.
A recent report from TD Economics was more optimistic, saying Trump's best and most likely use of tariffs would be as a bargaining chip to force Canada into concessions when it comes time to renegotiate CUSMA — the trade agreement between Canada, the U.S. and Mexico — in 2026.
One scenario some trade-watchers envisioned is that Trump will swiftly announce tariffs on everything early next year, then use them as leverage to force other countries to reorient certain policies.
In other words, Canada faces an intense year ahead in bilateral relations.
A sense of déja vu
In an effort to set a positive tone on Wednesday, Prime Minister Justin Trudeau congratulated Trump on his victory and called the friendship between Canada the U.S. the envy of the world.
"I know President Trump and I will work together to create more opportunity, prosperity and security for both of our nations," Trudeau said.
But for Canadian veterans of the trade battles with the first Trump administration, there is a sense of déja vu.
"Welcome back to an administration that put national security tariffs on the Canadian aluminum that its own military buys to make a point no one understood," said Flavio Volpe, head of Canada's auto-parts lobby association, referring to Trump's past tariffs on Canadian steel and aluminum.What impact will the U.S. election have on Canadian politics? That is the topic of our Ask Me Anything segment this week on Cross Country Checkup. Leave your question here and we may read it on the Nov. 10 show
Volpe held out hope that Canada's co-operation with the U.S. to keep out Chinese imports might create common ground between the two countries.
But the big change from Trump's first term is that he's now talking about placing tariffs on everything, from everywhere, describing the move as a strategy to force manufacturers to build in the U.S.
WATCH | Donald Trump tells supporters he 'made history', as he declares election victory:
Donald Trump claims a 'magnificent victory' after winning several key battleground states, including Pennsylvania, and tells supporters they are a part of the 'greatest political movement of all time.'
It's believed Ottawa will try negotiating exemptions to the tariff, and failing that, will threaten retaliation. Canada's ambassador to Washington has already mused publicly about the possibility of a response.
This in turn risks plunging Canada into a painful trade war with its powerful neighbour.
A recent report from TD Economics was more optimistic, saying Trump's best and most likely use of tariffs would be as a bargaining chip to force Canada into concessions when it comes time to renegotiate CUSMA — the trade agreement between Canada, the U.S. and Mexico — in 2026.
The question of military spending
It's not just Canadian trade that could be impacted by Trump. Military spending is another possible flashpoint.
A potentially important player in the next Trump administration, Elbridge Colby, told CBC News this year that he would urge using unprecedented means like economic penalties as a stick to prod Ottawa to scale up its contribution.
There will be pressure to spend more, faster, especially in the Arctic.
Washington has not been mollified by the Trudeau government's recent promise to reach the historic military spending target of two per cent of GDP. This was illustrated by a recent op-ed from a powerful Republican congressman ridiculing Canada as the greatest threat to NATO.
At a rally in South Carolina earlier this year, Trump said the U.S. would not protect allies who fail to meet the two per cent target.
WATCH | We may be on the verge of an era of global trade wars, says David Frum:
'We may be on the verge of an era of global trade wars' if Trump wins, says Frum
Duration3:41
David Frum, staff writer at The Atlantic and a speech writer for former president George W. Bush, believes Donald Trump could 'mess up' the Canada-U.S.-Mexico free trade agreement and hold those countries 'to ransom' in order to get what he wants. He also suggests Trump could cut of weapons to Ukraine and cost it the war against Russia.
Immigration is another question mark for Canada.
Trump has promised the mass deportation of millions who entered the U.S. illegally. The fear of deportation could produce a surge of asylum claimants seeking refuge at the Canadian border, one analyst said.
"Individuals [may] try to run to Canada to avoid that [deportation]," Christopher Sands, head of the Canada Institute at Washington's Wilson Center, told CBC News last week. "So we could fight over that."
Such a phenomenon could exacerbate tensions within Canada. Ottawa has already been under pressure from the provinces to curb immigration levels.
Just last month, the Trudeau government announced cuts to immigration to relieve pressure on the housing market. Trump noticed this, posting on social media: "Even Justin Trudeau wants to close Canada's borders."
Kelly Craft, a former U.S. ambassador to Canada, told Radio-Canada that Trump intends to continue his policies from 2016. 'Just look at the first four years — that's a good gauge of what's going to be coming forward.' (Timothy D. Easley/The Associated Press)
"We are the only 'stupid ones' that allow people, including hundreds of thousands of criminals, to freely come into the United States through our ridiculous 'open borders' policy," Trump said.
There was a swift sign of the potential ripple effects the migration issue could have within Canada.
The Quebec government hinted Wednesday that it will step up policing of its own border, deploying provincial personnel to the international boundary.
Francois Legault's government faces a difficult re-election fight against the pro-independence Parti Québécois, which has seized on migration as an argument for separation.
"We are the only 'stupid ones' that allow people, including hundreds of thousands of criminals, to freely come into the United States through our ridiculous 'open borders' policy," Trump said.
There was a swift sign of the potential ripple effects the migration issue could have within Canada.
The Quebec government hinted Wednesday that it will step up policing of its own border, deploying provincial personnel to the international boundary.
Francois Legault's government faces a difficult re-election fight against the pro-independence Parti Québécois, which has seized on migration as an argument for separation.
WATCH | The potential impact of Trump's tariff plan on Canadian trade
Trump's tariff plan poses threat to Canadian trade, says economist
Duration 8:09
Jimmy Jean, chief economist for Desjardins, says U.S. president-elect Donald Trump's plan for across-the-board tariffs on imports could spark a trade dispute and disrupt the Canadian economy.
With files from John Paul Tasker
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