There is no point in hiding our eyes and covering our ears. Even though a majority of Canadians would prefer the Democrats to be re-elected, the polls are giving Donald Trump the victory.
The tide may yet turn in this surreal race, where the debate is sadly focused on the inability of both candidates to lead the country, rather than on the issues that affect the lives of voters.
Who knows? Maybe Joe Biden will agree to back out of this rematch that no one wanted, he who can’t convince the public that he has the cognitive capacity to do so. He hurt his cause by making a series of slips of the tongue on Thursday, introducing the Ukrainian president as Putin and referring to Trump as his vice president.
Still, another Democratic candidate would not be guaranteed to win either.
It is therefore imperative to prepare for the potential return of Donald Trump, who poses a risk of a “tsunami” for Canada, according to Bruce Heyman. This former ambassador of the United States to Canada warns that Trump 2.0 will be even “more extreme” than the first version1.
Canada cannot ignore the threats.
Donald Trump has promised the “biggest deportation in history” targeting the 11 million undocumented migrants who are “poisoning the blood” of the United States.
This fascist discourse seems impossible to realize. By depriving itself of 3% of its total workforce, the United States would seriously slow down its own economy.2.
But the mere re-election of Donald Trump risks provoking a stampede. Migrants could be tempted to cross the Canadian border rather than risk returning to their home countries, which they have often fled to ensure their safety.
All this as Ottawa seeks to reduce temporary immigration that has pushed Canada’s population growth to levels not seen since the 1950s. Newcomers are now struggling to enter the job market, as evidenced by their rapidly worsening unemployment rate (to 12.7%).3.
On defense, Donald Trump dropped a bombshell by encouraging Russia to invade countries that do not spend 2% of their GDP on military spending, NATO’s target.
At 1.4%, Canada is in the firing line.
Let’s stay calm, the Americans would not let Russia attack Canada without saying anything, because the proximity of our territories would pose a threat to their own security.
But if we do not have the capacity to defend ourselves, there is a real risk that the Americans will act unilaterally, undermining Canada’s sovereignty. Our territory, which is full of natural resources, must not depend on the whims of Washington.
So much the better if Canada reaches the 2% target in 2032, as Prime Minister Justin Trudeau announced in extremis this week. But for now, this distant objective is just a facade since it is not based on any concrete plan. By then, Donald Trump could decide to impose customs duties on certain Canadian industries in retaliation.4.
Precisely, Donald Trump swears to impose customs duties of 10% on all products imported into the United States, and even 60% for those coming from China.
Unfortunately, it is consumers who will end up paying the bill for this trade war that will drive up the prices of all products. Hello inflation and high interest rates!
Imposing customs duties on Canada would be all the more damaging because our production chains are fully integrated. In the automotive industry, a component can cross the border 10 times before ending up in a new vehicle.
But these rational arguments are unlikely to bring Donald Trump to his senses.
And Canada is particularly at risk because a third of our economy depends on our exports to the United States, a degree of concentration found in no other country with a population of more than 15 million.5.
But U.S. exports to Canada represent only 3% of the U.S. economy. Since the Americans can do without Canada much more easily than the other way around, they have the upper hand.
Canada would therefore benefit from concluding trade agreements with other countries to diversify its markets.
But since the United States will always remain our largest partner, we must prepare for the protectionist aims of our neighbor. How?
First, by leveraging organizations like the Canada-United States Regulatory Cooperation Council, which provides a forum for stakeholders to discuss regulatory barriers and improve cooperation.
Second, by strengthening our relationship with Mexico in preparation for the next round of negotiations on the Canada-United States-Mexico Agreement (CUSMA), which is up for renewal in 2026.
Third, by addressing the chronic lack of productivity of our businesses so that they are less vulnerable to external shocks.
Past history might lead us to believe that Donald Trump will not carry out his most untimely threats, at least not in their entirety. But this time, he is much better organized than during his first election.
It is better to prepare for the worst, hoping for the best.
1. Listen to an interview with Bruce Heyman (in English)
2. Check out an analysis from Scotiabank (in English)
3. Consult an analysis from the National Bank (in English)
4. Consult an analysis by Professor Frédérick Gagnon (in English)
5. Read an article from The Hub