What Donald Trump’s win means for Canada

Canada and the US have a deeply entwined economic and trade relationship.

Canada exports 75% of its goods and services to the US – and Trump’s promise of blanket 10% tariffs could significantly affect its economy.

“I do worry about what an across-the-board tariff would actually look like,” said Trevor Tombe, a Canadian economist with the University of Calgary.

“This is where details are really important – and we unfortunately don’t have details for what these tariffs would actually look like.”

In July, the Business Development Bank of Canada estimated the move could subtract $7bn from Canada’s GDP in the year it is implemented – mainly from a drop in business investment – and drive down the Canadian dollar.

Mr Tombe warned that Canada’s economic growth is already slowing and in a poor position to absorb shocks.

Also in question is the future of USMCA. The three trade partners will decide in 2026 whether to extend the pact for another 16 years.

John Dickerman, a US-based policy adviser for the Business Council of Canada, said Canada could lean on its previous experience renegotiating that trilateral deal six years ago to meet the challenge.

He said Canada should be consistent in its messaging on the issue, “reminding Americans that this deal has been good for them”.

Analysts say that Canada may have to make some concessions as it tries to navigate this new relationship.

Among them is working out how to address policies already unpopular with the US – such as Canada’s new Digital Services Tax – a 3% tax on major foreign digital services companies like Google and Amazon.

“The previous Trump administration took a really aggressive view on the Digital Services Tax,” said Dickerman. “I wouldn’t expect that to change. If anything, I expect it to amplify a little bit.”

Freeland, the deputy PM, addressed some of these concerns on Wednesday.

She said that Canada being the single biggest export market for the US gives the country “leverage” in future negotiations.