Canada May Have to Wait Out US Trade War Until Midterm Elections

Canada is facing a difficult situation in its trade negotiations with the US, according to Mark Carney. The country has made 'substantial progress' but there's still work to be done, said Carney.

Dr. Subhadip Ghosh, an associate professor at Edmonton's MacEwan University's School of Business, believes Canada has little choice but to endure the tariff wars until this autumn's American midterm elections. He says the US has more financial resources and is confident that Canada will eventually have to accept its trade demands.

Ghosh notes that Canada's decision to walk away from the revised trade deal was the 'best alternative to a negotiated agreement'. The US added terms that would have impacted Canada's ability to sign other trade deals, including clauses that would allow the US to rip up the agreement whenever it wished. Ghosh says the Americans felt they had almost all the leverage and pushed for a deal that favors them.

Canada has made efforts to diversify its economy, such as building a terminal in Kitimat, B.C., which is a transfer point for natural gas exports to Asia. However, Ghosh argues that the country still has a long way to go to be able to withstand US pressure.