The 2024 American presidential election will pit two candidates against each other whose economic achievements and programs are well identified: international cooperation and strengthening of social ties against assumed protectionism and tax cuts for businesses. On the eve of the Trump-Biden rematch, are there any economic issues for Canada to follow?
In Canada, the suspense is sustainable.
For two terms, the key word in presidential management of the economy has been protectionism. L’America First of Trump has survived under Biden, polite expressions to boot. Donald Trump’s renegotiation of NAFTA, resulting in the creation of CUSMA in 2020, did not radically change the structure of the original 1994 agreement linking Canada, the United States and Mexico.
Joe Biden was careful not to return to the protectionist legacy of his predecessor. He even intensified certain pressures, for example by threatening to increase customs duties on Canadian lumber. In addition, the massive subsidies deployed under his presidency, as part of the Inflation Reduction Act of 2022, have thrown Canada into a sort of “subsidy war”.
These dynamics suggest a continuity rather than a break in economic protectionism.
The result of the election will therefore surprise no one in Team Canada, set up by Prime Minister Justin Trudeau to defend Canadian interests in anticipation of the election among the neighbors to the South.
The 45e and 46e Presidents have also shown the same desire to repatriate investments and profits to American soil. Although the objective is similar, the strategies nevertheless differ significantly. Under the leadership of Donald Trump, the reduction in capital taxation aimed to attract capital to the United States, but the effect on investment flows remained hypothetical.
Joe Biden’s administration, for its part, supported an international agreement to establish a minimum global tax rate with the aim of avoiding excessive tax competition and a race to the bottom in corporate taxation. This initiative, laudable for its ambition for international cooperation, however authorizes exceptions and leaves room for tax loopholes, which could limit its impact.
In neither case did Canada seem affected by developments in US tax policy.
The experience of the Trump and Biden administrations therefore puts into perspective the commercial and financial implications of the November election for Canada – without even mentioning the counter-powers of the American political system and the complexity of the international balances which limit real power. Of the president.
On the other hand, the return of Trump would heavily affect bilateral relations and the Canadian economy through environmental policies and migration issues.
Real divergences
From the withdrawal of the United States from the Paris Climate Agreement under Trump to their reintegration requested by Biden from the first day of his mandate, the differences between the two presidents are real on the environmental level. They extend to fossil fuels, favored by Trump, while Biden focuses on electric vehicles. For Canada, the issue is crucial.
On the one hand, Trump’s support for the fossil fuel industry meets Canadian export interests, notably through projects like Keystone XL, aborted by his successor – however at the expense of Canadian ambitions in terms of reducing greenhouse gas emissions. Greenhouse.
On the other hand, a Biden administration opens up prospects for the Canadian clean energy industry, which hopes to once again become competitive with American companies less constrained by environmental and tax regulations.
However, it is in the area of migration that the presidential election could have the most perceptible economic impact for Canada.
After Donald Trump’s victory in 2016, the Immigration Canada site found itself clogged with requests from south of the border – Americans, residents, prospective immigrants or asylum seekers. Although few of these steps came to fruition, they nevertheless revealed the aspiration for a model of society that Trump’s America no longer seemed to offer.
In this context, Canada is potentially an attractive destination, both for those who risk being portrayed as “undesirable” by a Trump presidency and for qualified people seeking quality and a living environment aligned with their social beliefs and values.
Paradoxically, a Trump victory in 2024 would offer Canada the opportunity to expand its talent pool, particularly in key sectors of the economy. This effect must still have been planned: the strategic adaptation of Canadian immigration and integration policies to capture these potential flows is the key.
The American presidential election generates many uncertainties, limited in the commercial or financial areas, but much more significant for our environmental and migration policy. Faced with these, the time is not for anxiety, but for mobilization. Before us, two scenarios, ultimately highly predictable, tell us not to miss the turning point.
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reference: www.lapresse.ca