The US election will profoundly impact Canada’s political and economic atmosphere. Because of the excellent volume of trade between the two countries, who steps into the White House will make a significant difference.
“Tariffs are the greatest thing ever invented.”
Although both candidates are headed towards more protectionist policies in the future, the events that would unfold when either of these candidates were elected are dissimilar. This short reading will look at what you should expect the impact on your business to be in Canada and offshore, depending on the outcome of the US election.
Kamala Harris is expected to continue this existing trade policy and maintain stability. It can result in increased corporate profits.
However, there are also talks of a weaker US dollar, which could lead to decreased profits or short-term inflation.
Republican candidate Trump is likely to cut taxes. Such cuts will increase profits, particularly in the corporate domain.
Similarly, oil and gas sectors and banks will likely do well under Trump due to tax cuts and proposed deregulation.
Harris looks poised to continue the policies of the Biden administration to expand trade with Europe, Asia, North America, and beyond. At the same time, she also wants to regulate trade with certain countries like China.
He has proposed a 60% tariff on China and is also considering a 10% to 20% tariff on other countries.
While Canada has a progressive relationship with the USA, it will introduce its own tariffs, as it did in Donald Trump’s previous administration.
Canada has positioned itself as a close ally of the United States in the world’s ever-changing political and economic landscape. However, it is not exempt from taxes and Tariffs. Therefore, it will seek to counter those tariffs with some of its own. It can also target the sectors that are more related to the members of Congress so that the reaction is more effective.
During the Trump administration, the United States placed tariffs on aluminum and other metals. Canada’s overall exports to the United States are around 625 billion dollars, and increased tariffs on these exports will adversely impact many Canadian businesses.
When US President Donald Trump introduced an increase in tariffs previously, it did not significantly impact the trade deficit. It rather led to job loss in specific sectors of the United States. Therefore, the Canadian Government and businesses in Canada will be carefully monitoring the evolving situation and how the election in the USA unfolds.
Businesses will be particularly concerned about those areas in which they deal with China.
If Donald Trump becomes president, the potential for a trade war will increase. If he introduces tariffs, violating the United States’ treaty obligations, it will damage the Canadian and US economies.
Retaliatory tariffs from other countries can significantly impact the global economic climate, lead to economic tensions, and negatively impact the industrial sector, including the overall manufacturing sector in Canada.
The government and businesses in Canada must develop contingency plans and should prepare for any eventuality.
Under both Trump and Harris, protectionism is likely rising in the USA.
While Trump is more of a proponent of made-in-America, both candidates are heading toward protectionist measures. These measures can also impact the Canadian economy.
With their America First policies, both candidates can introduce such regulations, which will impact foreign investment.
These regulations will likely protect domestic businesses and enhance scrutiny of foreign Investments.
They are also likely to strengthen their anti-trust laws and enforce strict boundaries.
Well, although the eve of the election has increased market volatility, it is not likely to cause a disaster for investors.
