The trade war could leave lasting traces
The intensification of the trade war between Canada and the United States could permanently alter cross-border trade, marking the potential end of an era of strengthening economic ties between the two countries, according to experts.
New tariffs and the growing unreliability of the United States as a trading partner are pushing many Canadian companies to look to other markets and enter into new trade deals, American Peter Schiff, a prominent investment strategist, said in an interview.
“As other relationships develop over the next few years, they may not be so easy to break,” said Peter Schiff, chief economist and global strategist at Euro Pacific Asset Management.
“This could have a lasting impact on the overall volume of trade,” he said.
While profit-seeking companies will continue to trade across the border where possible, he said the more companies are forced to find new markets, the more attractive those markets will become.
“As Canadian companies need to invest more in logistics or infrastructure to serve other markets, it could prove more lucrative to develop these relationships,” argued Peter Schiff.
This disengagement from the United States could become even more pronounced if the US dollar weakens, making the US market even less attractive as a trading partner, he added.
“Americans are not the only buyers,” said Peter Schiff. We are simply the most convenient buyers because goods do not have to travel long distances to get here. But these Canadian companies can find other customers and seek business relationships with other countries. »
Canada has long favored the United States as a key trading ally.
For decades, the two countries have signed successive trade agreements that have gradually reduced barriers and strengthened economic integration.
However, the period of deepening ties may have passed its peak and is moving toward lasting structural change, according to Drew Fagan, a professor at the Munk School of Global Affairs and Public Policy at the University of Toronto.
“There will be lasting change,” he said. This lasting nature is not only due to the customs duties that have been imposed. It is also a change in mentality and a more protectionist and more nationalist United States. »
Canada's historical dependence on the United States was based on both practical reasons and shared values, explained Drew Fagan.
“There were good reasons why we were so dependent on the American market,” he said. The United States is close, it's a big country, and the cultural ties run deep. »
“Even though the United States is extremely competitive, there were opportunities there. Today, some of them are disappearing. But many links will continue,” he added.
