It’s known all over the world that the United States is Canada’s largest, and most influential, trading partner. The two bordering countries rely heavily on each other, and for years the relationship between the two nations has stood the test of time. Fast forward to the Trump era, where tension between the two governments is high. In recent months, Donald Trump's attempt to renegotiate the North American Free Trade Agreement (NAFTA) combined with his threat of pulling out has brought a sense of uneasiness in the Great White North.  

To date, talks between the two governments have gone back and forth and a final deal is yet to be decided. The lingering deal and the uncertainty of what will result at the end of it all is beginning to take its toll on Canadian companies. Businesses in Canada that have operations in the United States, such as Solex Thermal Science have a strong level of interest in the final outcome. This uncertainty is especially affecting the automotive industry who may see the most significant impact to their operations. The recent tariffs of steel and aluminum, coupled with potentially more tariffs on the way, has only caused more issues for the industry. Investment is at a standstill until it becomes clear what the future of the North American Free Trade Agreement holds for the economy of both nations.

Threats to the current North American Free Trade Agreement deal have only strengthened as Mexico and the United States come closer to a separate trade deal that would replace NAFTA if the US and Canada failed to reach an agreement. Nevertheless, pressure from Congress is keeping the bilateral agreement with the US and Mexico at bay.

Nevertheless, Canadians are optimistic and believe an agreement will be reached that will benefit all three North American countries. Donald Trump's boisterous claim of cutting off Canada from the North American Free Trade Agreement is easier said than done. Trump has failed to see that US exports of goods and services have soared ever since NAFTA was introduced several years ago. For years, Canada has been the top destination for US exports, therefore any drastic changes to the deal that would threaten Canadians will need to be looked over by the White House. Trump's threat of imposing tariffs on vehicles manufactured in Canada will only backfire and hurt the US economy rather than grow it.

Apart from the auto industry taking a hit, the dairy farmers of Canada are keeping a close eye on how the events will unfold. The already fragile industry could be further impacted if the agreement falls through. Canadian dairy farmers must follow strict rules that prevent overproduction, at the same token the US faces serious over-production issues. No doubt this will have negative repercussions for Canadian dairy farmers.
As trade talks resume this week, Canadian businesses will be eagerly waiting to see how it all unfolds. Until then, it’s business as usual with a little extra anxiety.

Published by Shubhi Gupta