Trump's return to the White House is bad news for Canada

It is official, Donald Trump has been re-elected and will be moving back into the White House in January. Experts believe that having Trump as President of the United States will be very bad for Canada.

Donald Trump aims to implement significant tariffs on U.S. trade partners to enhance the nation's economy. The effectiveness of this plan is currently a subject of intense debate. A former aide to Canadian Prime Minister Justin Trudeau expressed concerns that Canada would be severely affected by Trump's proposed tariffs.

Trump and Trudeau had a very contentious relationship while the former president was in office. Trump was not a big fan of his neighbor to the north and issues between Canada and the United Staes could reach new highs if Trump is reelected by the American public.

According to Reuters, the former president has vowed to impose a blanket 10% tariff on all foreign goods imported into the country, and he has even said China would be hit by a 60% tariff on its goods. However, Canada might suffer more than any other nation. 

The former principal secretary to Trudeau, Gerald Butts recently revealed that Trump’s plan to impose 10% on imported goods would hit Canada far “faster and harder than just about anyone else," based on the interlinked economic relationship between the countries.

Butts explained during an interview on CBC’s ‘The House’ that he did not believe there would be a way to talk Trump out of imposing 10% tariffs on Canada and cautioned that Ottawa needed to start preparing for a world where the former president is reelected. 

"It's more how do you prepare for that, and how do you prepare for the inevitable global economic fallout that's going to come from a Trump presidency?" Butts explained about the possibility of Trump taking office again and going through with his proposed tariffs. 

CBC News reported that Butts was involved in many closed-door meetings between the former president and Prime Minister Trudeau, and he explained Trump's public posturing is exactly who the former president is behind closed doors, which isn’t good for Canada. 

"He believes the winner of all negotiations happens to be the person who has the most leverage," Butts said, and if he is correct, that will prove to be a big problem for Canada since the United States holds all the leverage in their bilateral relationship. 

Other Canadian officials are also warning about the problems a second Trump term in office could bring for Canada regarding the former president's proposed tariff policies. It is more than likely Trump will follow through on his proposal. 

"All indications are that former president Trump is committed to imposing tariffs, and doing it quickly," one Canadian official said about Trump’s future plans based on insight that they had from unofficial talks with former Trump Treasury Department contacts. 

"He believes in tariffs as a policy tool,” the unnamed official told CBC News, adding that it wasn’t surprising that Trump was offering up such tariffs to potential supporters in a close election. However, Kamala Harris could also be damaging for Canada. 

Butts warned in his interview that if Vice President Harris wins the election on November  5th, Canada can’t just "kick back and think that everything's going to be rosy." Harris could come with her own set of economic problems for Canada. 

Experts told CBC News that a Harris win would likely mean a continuation of the status quo. Under Joe Biden, Canada has seen the United States impose tariffs on exports like softwood lumber—though Trump’s tariff regime would be far worse. 

How the United States would deal with the Canada-United States-Mexico Agreement (CUSMA) and its renewal and possible review in 2026 is something that Butts explained was really still up in the air with Vice President Harris, but it's clear she would be the better option for Canada’s economy over Trump.

The Globe and Mail reported on October 31st that if Trump is elected and goes through with his proposed 10% tariff policy, Canada could suffer a 0.88% to 1.55% reduction in incomes according to University of Calgary economist Trevor Tombe. 

TD economist Marc Ercolao believes Trump’s 10% tariff could reduce Canada’s Gross Domestic Product (GDP) by 2.4% in the first two years. This would be a major blow to an economy the International Monetary Fund reported in June 2024 is only expected to by 1.4% to 2.4% in 2025. So, Trump could be a major problem for Canada’s economy. 

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