Canada's experts outlined the implications for trade over Trump's threats on tariffs
Canadian experts spoke about the consequences for trade due to US President Donald Trump's threats on tariffs. This was reported by Al Jazeera on January 22.
Economists said Trump's promise to steer the country on a protectionist course poses a serious challenge for whoever succeeds Prime Minister Justin Trudeau.
"It's a daunting task for whoever succeeds Trudeau because from there it's a short walk to calling an early election," said Tony Stillo, director of the Canadian economics department at Oxford Economics.
It's pointed out that while tariffs were barely mentioned in Trump's inaugural speech on Monday, any hopes of a delay were dashed a few hours later when he announced he could impose a 25% tariff on Canada and Mexico as early as February 1.
"What happens to Canadian exports in the event of a tariff war with the U.S. is in many ways a determinant of economic outcomes because 80% of our exports go to the U.S. and that creates a huge vulnerability," commented Lars Olsberg, an economics professor at Dalhousie University in Halifax.
According to Stephen Brown, Deputy Chief Economist for North America at Capital Economics, the 25% tariff will have a "significant" impact on the Canadian economy and could trigger a recession. At the same time, the expert believes that Trump's threats to impose tariffs could be an attempt to gain leverage in negotiations on the US-Mexico-Canada Agreement, which will be renegotiated next year.
"(Trump - Ed.) will be looking for concessions to be able to say he has a good deal," Brown noted.
The expert is convinced that the U.S. president has made it clear - there are three areas of concern regarding Canada: the trade deficit, border security and Canada's relatively low defense spending in NATO.
According to Brown, Ottawa could tackle these problems in one fell swoop if it decided to purchase more defense equipment from the U.S., which would allow it to meet NATO spending targets and improve border security.
Earlier on November 26, 2024, US President Donald Trump said he would impose additional 10% duties on goods from China and 25% duties on all products from Mexico and Canada. He said China had failed to fulfill a promise to impose the death penalty on fentanyl traffickers, causing "drugs to flood" into the US - mostly through Mexico - on an unprecedented scale.
Prior to that, on November 20, The Washington Post (WP) reported that the trade duties Trump is about to impose could seriously damage European Union (EU) countries. According to economists, Trump's "protectionist measures" may cause further recession in Europe and complicate relations between the allies.
On November 6, it became known that the EU fears that after the election of Trump may start a new trade war between the countries of the association and Washington. It was specified that in 2018, as President of the United States, Trump, for reasons of national security, introduced a duty on steel at 7% and a tariff on imports of aluminum with a rate of 10%.
