If former U.S. president Donald Trump returns to the White House following next month’s presidential election, Canada’s economy would likely be negatively impacted, according to Desjardins’ senior director of Canadian economics.
Randall Bartlett told BNN Bloomberg in a Wednesday interview that the implications of a second Trump presidency would be “multifold” for the Canadian economy, noting that the Trump campaign’s rhetoric around tariffs is the main concern.
“Those are the direct impacts of the 10 per cent or up to 20 per cent tariff applied to imports from Canada,” he said.
“Beyond that, there’s also implications for things like the dramatic slowing in migration to the U.S., which would weaken the U.S. economy, particularly in sectors like construction.”
Bartlett added that Trump’s “drill baby drill” approach to the oil and gas sector may also put downward pressure on North American energy prices, ultimately weighing on incomes and profits brought in by Canadian energy companies.
“There are some offsetting impacts to those negative shocks but generally on net, a very meaningful drag on the Canadian economy,” he said.
By contrast, Bartlett said that if U.S. vice president and Democratic presidential nominee Kamala Harris wins the election, Canada’s economic relationship with the U.S. will look much the same as it does now.
“A Harris-Walz outcome is going to look a lot like the current baseline that we had baked-in, which is sort of a status quo kind of economic scenario; some slight differences, but generally pretty similar,” he said.
Bartlett explained that his research team examined the policy positions of both candidates, as well as decisions made by the first Trump administration around issues such as Canada-U.S. trade to determine how different election outcomes would impact Canada economically.
“And then we looked at how trade-exposed various commodities are that are exported from Canada, so we looked at 96 goods sectors, how trade exposed they are to the U.S., and then ultimately what the impact of those tariffs could be,” he said.
Bartlett added that while previous U.S. administrations have used tariffs to specifically target Canadian goods, Trump’s proposal to place a levy of up to 20 per cent on all imports into the U.S. would lead to less severe impacts for Canadian exporters.
“If there’s a blanket tariff on imports from abroad… there won’t be that same substitution away from Canadian exports, but there’s still going to be a meaningful impact as there’s domestic substitution away from imported goods and services,” he said.
Bartlett added that a Trump administration may decide to be more lenient with Canadian imports in certain sectors, but Trump’s tone during his first presidency was “to go after all imports to the U.S. regardless of any sort of long-standing relationships with other countries.”
“It’s possible that there could be some exemptions for imports from Canada. When we look at the energy sector in particular, we don’t think that a Trump administration would want to cause any sort of increase on energy prices in the U.S.,” he said.
“Other categories with some longer standing agreements possibly might get some exemption but it’s really anyone’s guess as to what the implications would be.”