Although international trade has long been affected by domestic politics former US president Donald Trump dramatically increased trade irritants be
Although international trade has long been affected by domestic politics, former U.S. president Donald Trump dramatically increased trade irritants between the United States and Canada. This was especially challenging in the agricultural sector where political interference in international trade is more prevalent than in the non-agricultural sector. In our recent article in the Canadian Journal of Agricultural Economics, we analyzed how Trump’s presidency affected agri-food trade between the two countries and how the situation might change under President Joe Biden. We argue that Trump’s negative rhetoric and actions heightened trade uncertainty and undermined global trading rules, which tends to disrupt international trade. This was a major challenge for a small open economy like Canada that depends largely on the American market. In particular, the politically sensitive nature of the agri-food sector makes agricultural trade highly dependent on diplomatic ties between countries. Canada’s relationship with the U.S. is important for the agri-food sector in both countries, but it’s somewhat one-sided in terms of Canadian reliance on the American market. Canada is the top destination for American agricultural exports, accounting for 15 per cent of the country’s total agricultural exports in 2019. Conversely, the U.S. is the foremost buyer of Canadian agri-food products, accounting for 58 per cent of total Canadian agri-food exports. This isn’t surprising due to the countries’ close proximity and similar consumer tastes and values. But the Canada-U.S. political relationship became hostile during the Trump presidency due to the former president’s erratic foreign policy decisions, tariff wars and his verbal attacks on Prime Minister Justin Trudeau. The tense political relationship created an environment of uncertainty, adversely affecting the bilateral trading relationship. Major trade disputes between the two countries at both the World Trade Organization (WTO) and within the former North American Free Trade Agreement (NAFTA) have largely involved the agricultural sector.
