Challenges regardless of outcome
The United States presidential election, regardless of the outcome, will impact the Canadian economy, as discussed in our previous release, 2024 U.S. Election: Impact on the Calgary Business Community. To effectively mitigate harms and improve our trading relationship with a Republican administration under Mr. Trump or a Democrat administration under Ms. Harris, it is critical to understand the parties’ proposed international trade and domestic economic policies.
This policy paper will outline some of the key points in each party platform as they relate to domestic economic policy and international trade and discuss high-level impacts of these policies.
On a high level, a potential second term under President Trump may continue where the first left off in terms of trading relationships; however, based on campaign promises and the recently approved 2024 Republican Platform, the protectionism and aggressive tariffs may increase. Similarly, assumptions that a Harris administration may operate under the same foreign trade policy direction as the Biden administration may be inaccurate. Harris’ record on foreign affairs and the recently approved 2024 Democratic Platform could indicate a more protectionist position based on environmental considerations and protecting domestic jobs and supply chains.
Republican Platform
The 2024 Republican Platform specifically references the following measures:
- Introduce measures to prioritize U.S. domestic manufacturing, energy, critical minerals, automotive and strategic supply chains.
- Introduce baseline tariffs on foreign-made goods and prevent the import of Chinese vehicles.
- Renegotiate failed agreements, forging an America First Trade Policy.
- Rebalance trade (referencing America’s $1 trillion per year deficit in goods), ensuring domestic production can support national independence in essential goods and services.
- Protect American workers, farmers and industries from unfair foreign competition.
- Strengthen buy-American and hire-American policies.
Based on the 2024 Republican Platform, new or expanded tariffs, hostile trade agreement re-negotiations, programs to incentivize domestic manufacturing and supply chain development could all be implemented throughout a Trump presidency. Mr. Trump has previously committed to a 10 per cent levy on all foreign goods – a promise we see reflected in the Republican platform, and while a drastic move such as this would surely face significant opposition within the United States – perhaps even from within the Republican party – it is not unachievable. Were a Trump administration to decrease U.S. reliance on trade, prioritizing domestic production and ensuring national independence of essential goods and services, Canada could expect the value of our trading relationship with the United States to decline.
Specific sectors may face more significant challenges than others: the Republican platform calls out manufacturing and the automotive industry as well as critical supply chains more broadly. We could expect firms who are currently operating in manufacturing, automotive, energy and critical minerals to have a decreased competitive advantage when trading with the United States as their domestic capabilities expand.
