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THE REAL ECONOMY

Canadas conundrum on trade

How to move past its dependence on the U.S.

THE REAL ECONOMY | July 19, 2021

Ever since Joe Biden won the U.S. presidential race and his administration took over in January, Canadian officials have held out hope for an easing in trade tensions with the United States. Whether hoping for a broad reduction in tariffs imposed under Biden’s predecessor, Donald Trump, or a reentry by the United States into what is now known as Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Canada has kept a keen eye on the Biden administration’s approach to trade.

But six months into the Biden presidency, the results are coming into view. Not only have tariffs stayed in place, but in the case of lumber there has been an increase. It also appears less likely that the United States will seek to rejoin the CPTPP.

In a development hard to imagine even five years ago, China is now seeking to join the CPTPP, according to recent reports from Bloomberg. It’s surprising because a major reason for the agreement was to counter China’s rising influence.

It all leaves Canadian officials looking at the landscape on trade with a certain trepidation. Canada and the United States, after all, have generally shared a robust and balanced trading relationship that reflects a high degree of economic integration.

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Source: RSM Canada LLP

Used with permission as a member of RSM Canada Alliance

Canada’s conundrom on trade

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