Trade with Canada Under Biden: USMCA, Tariffs, COOL

Most Canadians agree that President Donald Trump will not be remembered as a friendly neighbor. There were some high-points: an updated NAFTA was finalized under the Trump administration’s watch. And while negotiations were acrimonious at times, the North America-wide trade agreement brought Mexico into the fold, and introduced the deal to the 21st century.

But some Canadian political analysts say the specter of Trump’s actions while in office will continue to cast a long shadow over Canada.

Dr. Meredith Lilly teaches International Affairs at Carleton University near Ottawa. Meredith Lilly is optimistic a Biden administration is less likely to hold tariff actions and threats over Canada’s head. But Lilly remembers that, during USMCA negotiations, many Democrats believed the agreement did not go far enough to push American interests. Meredith Lilly say that if Canadians think Biden will spend a lot of time rolling back trade actions from the previous administration, that’s likely not going to happen.

“I’m not nearly as optimistic that Biden will unwind various kinds of managed trade actions that came in under the Trump administration. Unless this is a priority for President Biden to undo, then it will be challenging for Canada to get them to undo things they don’t see as a problem on the American side.”

Meredith Lilly says the Canadian aluminum tariffs issue has yet to be settled, with quota restrictions still in effect. Lilly says the Aluminum issue takes her back to 2008 when Canada was sideswiped by the US Country-Of-Origin-Labeling requirement.

“In the case of aluminum tariffs, there is some continuing problem for Canada. There is a quota requirement, and I don’t expect that to go away. I’m always reminded of the Country Of Origin Labeling that Canada really got side-swiped by in 2008, that required all meat to be labelled for its originating country. It required American meat processors to take the Canadian and Mexican meat  out, so that they could qualify for that American-grown.”

The Country of Origin Labeling bill was a Democrat-endorsed bill that was not really popular with either President Bush or President Obama, but it took several World Trade Organization actions by Canada to finally overturn it.

“This was a bill that came in under a Democrat-controlled Congress, against President Bush’s wishes. Then Obama came to power. He was essentially forced to live with it because it was a Democrat policy. So, even though neither of the presidents, I don’t think they really believed in it, it took many years and billions of dollars of threatened retaliation to unwind that policy. And so that’s why I think that we can be really stuck with hold-overs from the Trump administration for a very long time.”