Canada-US FlagsOn November 8, 2016, Donald Trump was elected President of the United States.  What does this mean for Canadian businesses in terms of trade?

  1. President-elect Trump has said he is opposed to the TransPacific Partnership Agreement (“TPP”).  It is highly unlikely that TPP will be ratified.  Canada will have to negotiate strategic bilateral free trade agreements with TPP countries, starting with Japan, Australia, New Zealand and Malaysia.
  2. President-elect Trump has said he will renegotiate NAFTA.  What this means is unclear. Until we figure out what “renegotiation” means, it should be expected that there will be uncertainty in the Canada-US trade relationship.
  3. President-elect Trump is not a fan of the removal of U.S. unilateral economic sanctions against Iran.  It should be expected that new economic and trade sanctions will be implemented against Iran. We call this a “snap-back” of the sanctions.  The new sanctions may be worse than the old sanctions.  Canadian businesses with U.S. parents or subsidiaries or who use U.S. -made inputs should be very cautious when pursuing opportunities in Iran.  What may be permissible under Canadian law may become impermissible under U.S. law in 2017 (President-elect Trump takes the oath of office on January 20, 2017).
  4. “Thickening of the border” – Canada should expect that President-elect will implement new border security measures that will have an effect on Canada-US trade.  The flow of goods and services will slow down for a period of time until Trump realizes that he is hurting manufacturing businesses.  Canadian companies must join Partners in Protection and C-TPAT in the United States ASAP in order to reduce risks associated with new border security laws/policies.
  5. The buzz word will be “protectionism”.  Canadians should expect to see renewed protectionism. Expect new forms of protectionism that we have never considered.  It will not just be “Buy America” policies; which Canadians are used to seeing.
  6. Canada’s JLT Division (government trade lawyers) will be very busy filing cases with the World Trade Organization to react to President-elect Trump’s protectionist measures.  These cases take 3-4 years to run their course.  We won’t project a second term yet, but if there is one, expect to learn the word “retaliation”.  “Retaliation” is Canada being entitled to deny WTO benefits to goods/services from the United States to retaliate for the U.S. not bringing offending measures into compliance with WTO rules after Canada wins a case.
  7. Hollywood North will be booming. Many American celebrities have said they will move to Canada. There will be more filming in Canada.  The St.Lawrence Market district of Toronto looks a lot like Boston.
  8. Canada’s technology industry will see an increase in U.S. investment.  Many of the Silicon Valley establishment were in the Stop Trump movement.
  9. Canada should expect to see an increase in antidumping and countervailing duty cases in the United States.
  10. Canada should expect a revival of global safeguard cases brought in the the United States.  It is likely that President-elect Trump will implement safeguard measures if the procedures are taken so he can receive recommendations.  A safeguard is a form of trade remedy where U.S. manufacturing shows a surge of imports from all global sources and there is a finding that the imports caused or threatens to cause serious injury to the domestic industry.

For more information about what to expect in terms of Canada-U.S. trade relations, please continue to watch Canada-US Blog. Please contact Cyndee Todgham Cherniak (I have a Canadian law degree, a U.S. law degree and a Masters of Laws in international trade law) at 416-307-4168.