Canada is one of the most trade-dependent countries in the world, and 75 per cent of Canada's exports go to the US
Justin Trudeau. Pic/AFP
Canadian Prime Minister Justin Trudeau said Thursday he is re-establishing a special Cabinet committee on Canada-US relations to address his administration's concerns about another Donald Trump presidency. Deputy Prime Minister Chrystia Freeland, who is also the country's finance minister, will chair the committee, which also will include other top officials including ministers of foreign affairs, public safety and industry. "Following the election of President Donald Trump for a second term, the Cabinet Committee will focus on critical Canada-US issues," Trudeau's office said in a statement Thursday. Canada is one of the most trade-dependent countries in the world, and 75 per cent of Canada's exports go to the US.
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During Trump's first time, his move to renegotiate the North American Free Trade Agreement, or NAFTA, and reports that he was considering a 25 per cent tariff on the auto sector were considered an existential threat in Canada at the time. Trudeau called Trump on Wednesday to congratulate him and the two discussed the new free trade deal Trump reached during his first term with Canada and Mexico, the US-Mexico-Canada Agreement, which replaced NAFTA. Ottawa will soon have to focus on a scheduled review of the agreement in 2026. Although Trump once called Trudeau "weak" and "dishonest" during his first term, ties between the two countries have remained among the closest in the world. Freeland addressed reporters twice on Wednesday in an effort to reassure Canadians. "I know a lot of Canadians are anxious. I want to say with utter sincerity and conviction to Canadians that Canada will be absolutely fine," Freeland said.
"We have a strong relationship with the United States. We have a strong relationship with President Trump and his team. Let's remember that our trading relationship today is governed by the trade deal concluded by President Trump himself and his team," Freeland said. During the recent election campaign, Trump has proposed tariffs of 10 per cent to 20 per cent on foreign goods " and in some speeches has mentioned even higher percentages. Nelson Wiseman, a political science professor at the University of Toronto, said Canada should expect new tariffs and pressure to increase its military budget. According to NATO figures, Canada was estimated to be spending 1.33 per cent of GDP on its military budget in 2023, below the 2 per cent target that NATO countries have set for themselves. Trudeau has said Canada will meet the alliance's target by 2032. Trump has urged NATO countries to boost their own defence spending to ease the burden on the US to deter the alliance's enemies. "I expect that the free trade deal will be slightly modified as it was during Trump's first presidency and not dramatically," Wiseman said.
"Tariffs will hurt the Canadian economy economy but not cripple it. Canada has some cards to play in negotiations including countervailing tariffs, the concerns of American business leaders, and Canada's storehouse of critical minerals." The Canadian government notes the US and Canada are each other's largest trade partners with nearly 3.6 billion Canadian dollars (USD 2.7 billion) worth of goods and services crossing the border each day in 2023. The ties between the two countries are without parallel anywhere in the world. There is close co-operation on defence, border security and law enforcement, and a vast overlap in culture, traditions and pastimes " with shared baseball, hockey, basketball and soccer leagues. About 400,000 people cross the world's longest international border each day and about 800,000 Canadians live in the US. Robert Bothwell, a professor of Canadian history and international relations at the University of Toronto, said Canadians should be worried about potential rash actions on tariffs and trade. "How would you feel if old Uncle Donald was feeling whimsical one morning and decided to do " oh, whatever he'd just heard on Fox News?" Bothwell said.
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