To fight Trump, “a transformation of our economy will be necessary”

Is Donald Trump right to say that the American economy can do without Canadian products? No, retorts Richard Ouellet, expert in international economic law, who puts forward solutions to confront this president “who understands nothing about international trade”.

The statement made Tuesday at a press conference by the President-elect of the United States, Donald Trump, according to which his country does not need [nos] cars, [notre] lumber nor anything we havedoes it correspond to reality? And faced with the threats brandished by Donald Trump, how should Canada react?

In interview at All one morning on ICI PREMIÈRE on Wednesday, the professor of international law and holder of the Chair on the new challenges of economic globalization at Laval University, Richard Ouellet, provided some answers, while also revealing his fears.

On Tuesday, the president-elect of the United States declared that his country lost 200 billion dollars per year to protect Canada. What was he referring to?

RICHARD OUELLET – I think he’s talking about military spending and adding up the trade deficit that the United States has with Canada, due to the fact that we export a lot of oil to them.

And when Donald Trump says thathe will annex Canada by economic forcewhat does he mean?

R.O. – My impression is that he wants to take even more trade sanctions against us and apply the tariffs he announced. In international relations, Donald Trump has no friends and, above all, no allies. He sees no advantages in trading with Canada.

Donald Trump will have to have discussions with the business community in the United States, because he understands nothing about international trade; I dare say it like that.

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With less than two weeks until Donald Trump is sworn in, what should Canada expect?

R.O. – My main fear is that he wants to sign mini-deals, mini “deals“, product by product: an agreement [portant] just on wood, then just on critical minerals, or on oil, etc. And in the rare sectors where he thinks he has an advantage in trading with us.

Joe Biden’s administration has concluded such agreements with countries like Japan and South Korea on critical minerals, and the United States already had such an agreement with Canada, covering timber.

How would these piecemeal agreements penalize us?

R.O. – When the agreement works product by product, when it is targeted, and small, it is always the biggest that wins; History teaches us this well!

When there is a global agreement between two economies, everyone benefits more or less. When the agreement affects all trade, we have negotiating leverage. For example, in a situation where the United States is asked to have access to this or that sector of the American economy — for our PME for example – and they tell us no, we can then reply: “listen, as for our oil, or our electricity, or steel and aluminum, we will have to see …”

But is Donald Trump right to assert that his country does not need our cars or even our lumber?

R.O. – He is completely wrong! Donald Trump completely needs the integration of the auto industry [par exemple, des pièces fabriquées en sol américain et assemblées en sol canadien, ou l’inverse, NDLR] because the automobile sector cannot compete with Chinese and Asian vehicles and even, in some cases, with European vehicles. Without the economy of scale that Canada provides, the American automobile industry will lose market share day after day.

Donald Trump cannot do without Canadian oil either. It is not for nothing that we sell them $108 billion worth of oil per year.

What about lumber?

R.O. – Same: Americans don’t like to buy our wood, but they buy it anyway because we are able to supply them in large quantities at prices they are unable to match.

In the case of steel and aluminum, the Canadian industry is more efficient and produces them in a much less polluting manner than the American industry.

Structurally, in the North American economy, Americans absolutely need Canadian energy and natural resources. It’s clear.

What should Canada’s posture be in the face of Donald Trump’s offensive?

R.O. – Donald Trump does not understand that his economy needs ours. This has not been part of his thinking or his speech for years. People in the United States will have to make him understand this because the Canadian discourse does not seem to reach him.

But many told him, including Prime Minister Justin Trudeau and his minister Dominic LeBlanc who went all the way to Mar-a-Lago to tell him in person. It didn’t work! What should be the next step?

R.O. – The next step will be to tell Donald Trump: well! If you don’t need our products, don’t buy them. We will find other customers.

There is no shortage of customers for Canadian oil on the planet. Europe, which is looking for other sources of energy, especially since Russia’s invasion of Ukraine, may prefer to buy from Canadian oil ships rather than Russian pipelines.

Canada must stop being [uniquement] supplier of energy or natural resources and start doing more processing. All in order to be able to sell high value-added products which will find themselves in a better position in the supply chain and which will provide more profit margins and good jobs.

Some transformation of our economy will be increasingly necessary with a president like Donald Trump, who thinks he doesn’t need us.