Report: If Trump wins election, Canada will face larger economic impact than U.S. | Globe Echo
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A new report by Scotiabank Economics warns that Canada could face a greater economic burden than the United States if Donald Trump wins the upcoming presidential election and follows through on his promises of tax cuts and tariffs on all U.S. imports. The report suggests that if Trump imposes a 10% tariff on all imported goods, except for China, which would face a 60% carve-out on its exports, the U.S. economy could see a GDP drop of more than 2% by 2027, along with a 1.5% increase in inflation and a 2% interest rate hike. Canada, being heavily reliant on trade with the U.S., is expected to see a 3.6% drop in GDP, along with increased inflation and interest rates. The report emphasizes the urgent need for Canada to address its productivity issues to withstand economic shocks caused by trade policy changes in the U.S. and abroad. Trump's tariffs on Chinese goods and other imports during his presidency have already had a negative impact on the U.S. economy, costing American manufacturers billions of dollars and shrinking the economy by 0.3%. The report also explores the potential impact of Trump's vow to mass deport roughly 10 million undocumented immigrants living illegally in the U.S., which it deems to be economically harmful and politically and logistically infeasible. It predicts a 3% permanent reduction in U.S. employment and GDP as a result. Scotiabank suggests that Canada and the U.S. could mitigate the economic harm from tariffs by negotiating an exemption under the Canada-United States-Mexico Agreement, which succeeded the North American Free Trade Agreement. Such a carve-out could reduce Canada's short-term GDP drop by half and its long-term drop by 0.3%. The report emphasizes the key difference in trade approaches between Trump and Biden, with Biden taking a collaborative approach while Trump focuses on personal benefit.
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