Table of Contents
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- Impact on Energy Companies
- Energy sector
- Will There Be Some Hard Hits on the Economy?
- Canadian Retaliation Will Also Be Costly for Businesses in Canada.
- What Does the Trump Presidency mean for Canadian Banks and Insurance Companies operating in the US?
- How will Trump’s border management impact small and medium businesses in Canada?
- Can We Expect any Exemptions for Canada?
- Conclusion
According to experts, a Trump Presidency presents “Ugly Choices” to Canada. Ultimately,
“No country in the world sells 78% of its exports to one market.”
While Canada is particularly dependent on the US for exports, there is a real chance that a change in the US presidency will greatly impact the Canadian economy. The unfolding situation is of particular concern for the province of Alberta, whose oil and gas market can face tough competition in terms of prices from the US deregulation of the energy market.
The following reading looks at various impacts that businesses can expect. Knowing this is essential for preparing contingency plans beforehand.
Impact on Energy Companies
Due to Donald Trump’s “drill baby drill” approach in the energy sector, the profits made by Canadian companies are trending downward because of increased pressure on energy prices in North America.
This is because Donald Trump’s deregulation of energy markets and enhanced extraction activity will negatively impact Canadian energy markets.
Similarly, Donald Trump is not concerned about climate and environmental laws, so he will likely speed up oil and gas extraction.
This will give tough competition to the Canadian oil and gas sector.
Will There Be Some Hard Hits on the Economy?
Many experts believe growth will stagnate in Canada due to the planned 10% increase in tariffs on Canadian exports. This is in addition to the 20% floating levy.
Other experts use words like recession for Canada’s economy, while others believe that Canada will not have a recession.
In fact, some have calculated a 1% to 2% reduction in Canada’s annual GDP.
Canadian Retaliation Will Also Be Costly for Businesses in Canada.
In response to the US tariffs, Canada will likely introduce its range of import taxes. It’s not that such taxes will impact the US only. There will be harsh implications for Canadian manufacturers and businesses.
As it happened in the previous Trump administration, Canada imposed a wide-ranging tariff on numerous items. These included juices to lawnmowers, pharmaceuticals, and automobiles. It will lead to additional import costs for businesses and likely cause inflation.
Some suggest that sectors like recreation, entertainment, etc., will be particularly hurt by the decrease in purchasing power and loss in savings.
In the previous term, the Canadian government had drawn a long list of goods that it put tariffs on, and most of them were manufactured in the Red States. It was so, so that they could raise their concern to the Republicans to a maximum level.
What Does the Trump Presidency mean for Canadian Banks and Insurance Companies operating in the US?
Ironically, the presidency is likely to bring good profits to the sectors. Donald Trump has promised to deregulate these large sectors and enhance the ease of doing business. Those companies that draw most of their revenue from the US will see a steeper growth curve.
How will Trump's border management impact small and medium businesses in Canada?
Trump’s presidency will be much more disruptive this time around.
- Desjardins
According to the Canadian Chamber of Commerce, 3.6 billion dollars worth of goods and services travel daily across the US-Canada border.
Stringent border management will make it difficult to move goods and services across borders and disrupt the cross-border supply chain.
It is also likely to impact small businesses in Canada significantly.
Can We Expect any Exemptions for Canada?
In his previous tenure, Donald Trump’s Policy was not to create exceptions. Rather, he would go for anything that enters the US borders. However, Canada, being a long-standing ally of the US, will expect some relaxation. In the absence of this, the impact of the new tariffs on around 96 goods sectors is almost certain.
In that case, the Canadian government is likely to tell its citizens that there are reasons why Canada should matter much more to the United States than what is evident from Trump’s policies.
Conclusion
From no impact to the recession, there are very different opinions about the prospects of a Trump presidency on Canadian businesses. While it is highly unlikely that the impact of the Republican president’s policies will be ignorable, businesses and the government need to prepare some contingency plans to avoid unpleasant surprises.