Now that Donald Trump has won the U.S. presidential election, some hard thinking is needed on this side of the border.
In particular, two of Trump’s main promises have troubling implications for us. He has said he will impose a tariff of at least 10 per cent on imports from Canada.
And he has promised to deport illegal immigrants back to their country of origin. There are believed to be as many as 11 million such migrants, most of them Mexican by birth.
There are of course several points of uncertainty in these promises.
First, can he actually deliver on them?
The Republicans hold only a three-seat majority in the Senate, and perhaps a four- or five-seat majority in the House of Representatives.
Nor can Trump count on automatic support in either body. Several Senate Republicans are known for their resistance to Trump’s ideas, and the House of Representatives is a famously quarrelsome place.
However, assuming he does get the support he needs, other questions arise.
On the matter of tariffs, it’s unclear whether all Canadian exports would be hit, or just some.
The U.S. is by far Canada’s largest trading partner. Our annual exports to the U.S. exceed $600 billion, 10 times our exports to our next largest partner, the European Union.
A 10 per cent tariff across the board could cost our economy $60 billion or more, a devastating setback.
Of those U.S. exports, oil-based products account for around $180 billion. Many Canadian experts believe Trump would exclude those, since driving up the cost of fuel would anger his supporters.
Yet even if oil products are in fact excluded, a 10 per cent tariff on the remainder could cost in the region of $40 billion. The question then becomes, how does Canada respond?
For just as the U.S. is our largest trading partner, so is Canada America’s largest trade partner. U.S. exports to Canada amount to around $500 billion a year.
Evidently then, a trade war would cost both countries heavily. Hopefully the truth of this will form the basis for a negotiated outcome.
Trump’s second promise that has ramifications for Canada is his insistence that illegal immigrants are to be deported. What in fact he means by this is unclear.
Does he intend to confine the deportations to immigrants who have committed crimes in the U.S., some of whom are known gang members, or does he intend to deport all illegal immigrants?
If the latter, it must be expected that possibly large numbers will attempt to take refuge in Canada. Are we prepared to deal with this?
The federal government has already reduced the number of legal immigrants we admit each year, in a bid to reduce pressure on the housing market.
How would we respond to potentially thousands of refugees crossing our border? How would we manage the impact on our healthcare and social service systems?
It may be that either of these policies would create sufficient public backlash south of the border that Trump will have to back off. But it must be expected that in the first flush of victory, he will at least make a start on them.
And that could have a significant impact on our federal election, due next year.
If, in the run up to that election, there are signs of economic distress caused by tariffs, or social dislocation due to an inrush of displaced immigrants, there will be pressure on each of the federal parties to articulate a response.
How effectively they deal with Trump’s threats may well determine who forms our next federal government.
>>> To comment on this article, write a letter to the editor: [email protected]
