Canadian Chamber of Commerce warns of protectionism ahead of U.S. election

A caller study from the Canadian Chamber of Commerce is sending a stark informing up of the U.S. statesmanlike election, saying protectionist policies similar Donald Trump’s projected tariffs could harm economies connected some sides of the border.

The study authored by Trevor Tombe, an economics prof astatine the University of Calgary, said portion astir Canadians admit the value of commercialized with the U.S., Americans don’t person the aforesaid knowing astir however intricately the 2 countries are connected peculiarly astatine a clip of geopolitical uncertainty.

Canadian officials and concern groups person been gathering with Democratic and Republican counterparts crossed the U.S., making definite Canada is prepared for immoderate result of the November election.

Both statesmanlike candidates person campaigned connected protectionist policies that could origin uncertainty for Canadian trade. Whoever takes the White House volition beryllium successful complaint during the reappraisal of the Canada-U.S.-Mexico statement successful 2026.

“Both parties person moved successful protectionist directions for immoderate time,” Tombe said.

While Vice-President Kamala Harris is expected to enactment adjacent to the Biden administration’s way connected relations with Canada, past period she highlighted her absorption to the NAFTA replacement that was negotiated nether the Trump administration, saying it allowed large car companies to outsource American jobs.

Meanwhile, Trump has signalled his plans to enforce a 10 per cent across-the-board tariff connected imports if helium gets a 2nd term.

That connection caused interest connected some sides of the border.

Kirsten Hillman, Canada’s ambassador to the U.S., has tried to appease fears by saying that Washington would apt not find it feasible to use the tariffs successful Canada’s case.

If Trump’s tariffs were enacted, Tombe said it would harm economies connected some sides of the planetary border.

The report, which utilized models to estimation the interaction of the tariffs if they go permanent, suggested the determination would trim the size of the Canadian system betwixt 0.9 and 1 per cent, resulting successful astir $30 cardinal per twelvemonth successful economical costs.

The study estimates the U.S. would spot astir US$125 cardinal a twelvemonth successful economical costs.

Things would beryllium adjacent worse if different countries retaliated with tariff walls of their own. In that case, Canadian incomes would autumn by 1.5 per cent and productivity by 1.6 per cent, the study said.

“That’s, close there, $45 cardinal successful mislaid economical enactment successful Canada,” Tombe said. “Roughly speaking, that’s astir fractional the size of your mean recession. That’s a beauteous large hit.”

It’s not the archetypal clip specified a argumentation has been enactment guardant successful the U.S.

Tombe pointed to the 1971 “Nixon Shock,” erstwhile the U.S. levied a impermanent 10 per cent surcharge connected imports, including from Canada.

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Then, arsenic now, Canada sought an exemption, citing its unsocial and integral relation arsenic a reliable commercialized partner.

Nixon’s tariff lasted lone 4 months earlier it was reversed, but probe has recovered it resulted successful a 2.6 per cent simplification successful full imports into the U.S. from Canada.

The effect would apt beryllium greater today, Tombe said, due to the fact that the quality of commercialized betwixt the 2 countries has go much analyzable and connected.

Some experts person warned the narration betwixt the 2 countries shifted from being strategical to transactional arsenic Canada became little captious compared with different places successful the world.

The caller study said the Canada-U.S. economical narration is massive, profoundly interconnected and mutually beneficial.

It is made of “a analyzable web of proviso chains crossed galore sectors,” the study said, with Canadian exports utilized by U.S. businesses arsenic inputs to nutrient different goods.

“Canada-U.S. commercialized has cascading effects passim the U.S. economy, with Canada serving arsenic a captious and reliable supplier of inputs,” the study said.

There are besides cross-border investments, arsenic good arsenic exports that are harder to way successful services similar tourism oregon technology.

While the full American system is larger and mostly little reliant connected planetary commercialized flows, Canada is the apical export destination for 34 states.

In Michigan, commercialized with Canada is valued astatine 14 per cent of the state’s economy. It’s 10.2 per cent successful Illinois and 6.7 per cent successful Wisconsin.

Many Midwestern states are cardinal battleground areas successful the predetermination and commercialized policies impacting Canada would person a disproportionate interaction connected their businesses and citizens.

“The consequences of disruption are rather akin connected some sides of the border,” Tombe said.