Lessons from a vengeful Trump

At the time, they were dark days indeed.

When Donald Trump took his place in the White House four years ago, the Canadian economy was suddenly besieged.

The early days of his tenure set the tone. There was the ban on travel from Muslim countries, immigration havoc, the move to “tear up” NAFTA, the blunt pressure on American corporations to expand at home — and certainly not abroad.

Then came the on-again-offagain NAFTA negotiations, the tariffs on steel, the undermining of the global trade system, and the economic war with China. And the threats — unpredictable, sometimes real, sometimes just posturing, but always insidious in their chilling effect on trade and investment.

If Canadians breathed a deep sigh of relief during the inauguration of Joe Biden, it’s in no small part because the constant worry about what will hit us next has dissipated.

We have emerged from the impetuous and vengeful Trump era and we are mostly still standing, although we have a few bumps and bruises, not to mention a lingering suspicion of our largest trading partner.

“I don’t think everything is totally fine,” says Brett House, deputy chief economist at Scotiabank and a close observer of the international trade file.

The “residual impact” of Trump’s years in office is certainly not as harsh for the Canadian economy as the former president had hoped, House said.

“But it’s more lasting and durable than most of us would have wished for.”

Our greatest fears, at least at an economic level, did not come to pass.

Four years ago, Canadian businesses and leaders alike were biting their nails.

As Trump bullied American corporations to stay in or move back to the U.S. and expand their operations there, Canadian corporations revisited their own investment plans to decide whether it was still wise to expand in Canada.

As Trump promised, corporate tax cuts and threatened a border adjustment tax, foreign investors eyeing Canada did a double-take.

We are muddling through on the investment front.

Even as the pandemic took hold, Canada’s reputation as a good place to invest was still holding strong. Direct investment into Canada’s economy has lost some momentum, but that seems partly linked to oil and gas and not just a Trump effect. Exporters were similarly nervous.

The trading relationship that had been ensured by the North American free-trade agreement for so long meant that Canada’s trade sector could simply assume their access to American markets, where almost three quarters of our trade goes, was safe.