Donald Trump’s protectionist policies in regard to global trade relations have brought disruption to the United States’ traditional trade partners. Most notably, Canada, for which the United States has long been the most important trade partner due to geographic proximity and shared cultural heritage, has been affected. However, due to ongoing trade disputes between the two countries, Canada has sought an alternative to the U.S., namely China.
Canada has recently removed its 100 percent import tariffs on Chinese electric vehicles in exchange for lower tariffs on Canadian farm products. This highlights that the Canadian government views the economic threat posed by the United States as greater than that posed by China, which represents a major shift in policy. The unstable and unpredictable governance of the Trump administration in relation to trade policy is a clear reason for Canada to seek stability in other economies such as China.
The largest risk for Canada that may arise as a result of this trade agreement with China is the renewal of the North American trade agreement between the United States, Mexico, and Canada. The North American trade agreement has been essential to the development and growth of Canadian businesses, and there is a risk that the United States may not be interested in its renewal due to Canada’s pivot toward China. Trump is highly likely to make demands aimed at shifting manufacturing bases back toward the United States.
BakuTiflis 