The truth of the matter is that a deeply integrated economy to the United States is walking away. First it is important to understand that about half of Canada's exports to the US are natural resources. Some are mighty critical; oil, gas, electricity, timber and other minerals including Potash, where Canada sells about 90% of all potash used in the United States. Tourism is another $40 billion. Now, vehicles and parts are about $40 billion. It is largely understood that the US's intention is to retrieve these operations from Canada.
On the other side of the equation, what Canada imports from the US is foodstuff, vehicles and finished goods (do you know that there are other countries that sell finished goods). The issue that the Canadian Prime minister raised is that he wants to diversify away from the United States its exports, imports will take care of themselves.
As an aside the Canadian Federal government has given grants to Canadian timber mills to modify their equipment to produce timber products for the European and Asian markets. It is important to note that the original free trade agreement between USA and Canada was driven because of CANADIAN import duties on US made vehicles (in the 1950s – called the Auto pact). Canada's vehicle market is small, when compared to the US market, about 10% of the US market, however, Canada can see its auto industry being decimated by the President's policy, and can easily remove the protective barriers to imports from other nations than the United States (Europe, Japan and China).
The hand that Canada has been dealt is a difficult one (very much like Britain today), and yet their Prime Minister seems to find the right words. He has declared that the old alliance (with the US) is over, and that from friends (even brother) they are not competitors, even possibly enemies (no joke).
To give a sense of the change, Canada's national carrier, Air Canada just announced its SECOND cut to flights to the US, another 3,000 flights are off the schedule, Air Canada is deploying its fleet to other markets.
Canada's prime minister has for the past year impressed the entire world, the economy with the strongest ties to the US is the most aggressive at cutting its ties. The Canadian prime minister has indicated his intention to double the exports to other markets than the United States.
Fighting words, and a road map for the next labour leader
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