Navigating trade: How the U.S. election could impact Canadian exporters

As Canadian companies look to the future, the recent U.S. election brings a familiar, yet evolving, dynamic to the Canada-U.S. relationship. When assessing how the upcoming change in administration might impact your business, be rest assured that Canada benefits from a broad and deeply resilient relationship with the United States.

With this strong foundation in place, David Weiner, Export Development Canada’s (EDC) regional vice-president for the U.S., believes Canadian companies will continue to thrive south of the border.

Following  President-elect Donald Trump’s decisive victory on Nov. 6, Canada will work closely with the incoming administration and Congress on issues related to trade, investment, continental peace and security. Given this, Weiner emphasizes that Canadian companies should feel confident in the strength and breadth of the Canada-U.S. relationship.

“During President-elect Donald Trump’s first term, we successfully renegotiated the Canada-United States-Mexico Agreement (CUSMA), creating thousands of jobs and fostering investment and opportunity in our communities. This co-operation has made our region one of the richest and freest in the world,” says Weiner.

Canada and the U.S. share a rich history, common values and strong ties between our peoples. We have deeply intertwined economies that support millions of jobs and foster economic growth in both countries. When planning to expand, more than 70% of Canadian companies export first to the U.S.

“Canada will continue to advance economic opportunities while defending  Canadian interests,” says Weiner. “The United States benefits from Canadian technology, resources and secure energy.”

Indeed, 36 U.S. states rely on Canada as their top export market and more than 40 states export about $1 billion annually to Canada. Imports from Canada bolster U.S. industry, making it stronger and more competitive, while roughly 70% of Canadian goods exports to the U.S. are used in the production of other goods.

“The U.S. is more prosperous and secure when it collaborates with Canada, its closest strategic ally and economic partner. But like any relationship, there may be bumps along the way,” he says.

Weiner, who recently moderated an EDC webinar entitled How the U.S. election could impact trade, assures Canadian companies that EDC is ready to help with knowledge and financial solutions to grow their business in the U.S. and beyond, supported by a strong network of trade partners, including the Trade Commissioner Service.

As President-elect Trump’s potential tariff policies and plans for CUSMA emerge, Canada will continue to advance economic opportunities with the United States while defending our interests.
 

Andrea Clements, a senior trade commissioner at the Canadian Embassy in Washington, D.C., and webinar panellist, expects President-elect Trump may seek earlier engagement in the CUSMA review process. The agreement includes regular reviews beginning in 2026 to track progress and maintain stability.

“We see the review as an opportunity to ensure the agreement adapts to the changing economic landscape. Economic security considerations, which weren’t front and centre during the initial CUSMA negotiations, will likely be a core focus in future discussions,” Clements said.

Clements acknowledged that CUSMA partners might want to revisit certain areas, including addressing concerns about non-market practices of other countries.

“CUSMA is the cornerstone of the North American economic partnership. With such a broad relationship, there are bound to be issues and areas of disagreement; nonetheless, the overall working trade relationship is productive, positive and mutually beneficial. Our priority will be to ensure that market access and other benefits of the agreement are preserved, and that CUSMA continues to support economic growth across the region.”

Clements said the Government of Canada looks forward to continuing to work closely with both the United States and Mexico on strengthening CUSMA and advancing Canadian interests. The trilateral agreement was first signed in 2018 to replace the North America Free Trade Agreement (NAFTA) and came into force in Canada in July 2020.

“The reputation of Canadian officials on international trade matters is well-established. Our expertise runs deep and our teams are always ready to engage on both conventional and emerging issues. We’ll work with the United States and Mexico to strengthen CUSMA and the North American economic partnership. In the meantime, Canada will continue to advocate and communicate the benefits of trade and CUSMA, both at home and in the United States,” she said.

Clements highlighted the numerous benefits of CUSMA, including:

• Increases competitiveness: Creates advantageous conditions for Canadian businesses, including small- and medium-sized enterprises (SMEs) and maintains Canada’s preferential access to the U.S. and Mexican markets for goods.
• Makes trade more transparent and stable: Simplifies, standardizes and modernizes trade-related customs procedures to facilitate the movement of goods within the CUSMA territory.
• Reduces barriers to trade: The agreement addresses key challenges and barriers to doing business in the global marketplace such as technical barriers to trade, which disproportionately affect SMEs.
• Improves access for services companies: Enhances market access for Canada’s services industries, including financial services, and supports a predictable, stable and transparent investment environment for investors investing in North America.
• Increases market presence: Lowers the costs of participating in international trade, including by creating new rules that address potential barriers to digital trade and by protecting the free flow of information across borders. It also maintains Canada’s preferential access to U.S. and Mexican markets for the temporary entry of certain categories of business persons.

On the economic front, Ross Prusakowski, EDC’s deputy chief economist and webinar panellist, said President-elect Trump will inherit a U.S. economy that’s outperforming its global peers.

“The U.S. Federal Reserve and the economic data show that the U.S. economy is more resilient and energetic than other countries. While interest rates remain high, U.S. consumers continue to spend, propelling the economy ahead of its global peers,” Prusakowski says.

While consumers in other parts of the world, including Canada, have slowed their spending and built up savings in reaction to higher interest rates and inflationary uncertainty, this hasn’t been the case in the U.S.

Prusakowski noted that the incoming administration and Congress will need to focus on fiscal policy. “Coming out of the pandemic, their spending remains aggressive relative to peers, and the deficit as a percentage of GDP is large for an advanced economy.”

He expects the U.S. economy to maintain its strength into next year and urged Canadian companies to seize growth opportunities. “It’s about managing and tapping into that. We see strength in investments in energy and green technology, driven by infrastructure developments, including the Trans Mountain expansion.” 

How EDC can help

Whether you’re exporting to the U.S. or diversifying to markets such as Europe (through CETA—the Canada-European Union Comprehensive Economic and Trade Agreement) and Asia-Pacific (through CPTPP—Comprehensive and Progressive Agreement for Trans-Pacific Partnership), EDC offers the products, services and working capital solutions to help Canadian businesses go global and mitigate financial risks. David Weiner said EDC has the expertise to help exporters, including:

1. Getting paid: “The No. 1 pain point that all businesses face is getting paid. Don’t make the mistake of assuming that task is easier when you ship your goods to the U.S., instead of halfway around the world. The U.S. is a completely different legal jurisdiction. EDC’s credit insurance covers 90% of the value of your U.S. receivables if a customer doesn’t pay, which provides peace of mind.”

2. Access working capital: “What happens when you need capital for a new growth project if your line of credit is maxed out? Or, if you need to cover the cost of extra employees to meet a new U.S. order? At EDC, it’s our job to help you do business outside of Canada. One of the ways we do this is by taking on some of the risk your banks would need to assume to support your deals in the U.S. Through the Export Guarantee Program (EGP) we can provide a guarantee to your bank, taking on a percentage of their risk. In some cases, we take on all of the risk, allowing your bank to extend the working capital you need to grow in the U.S.”

3. Manage currency fluctuations: “Having a solid hedging strategy in place is key—especially given the potential for volatility in currency markets. With EDC’s Foreign Exchange Facility Guarantee (FXG), you can put a forward contract or currency option in place without tying up your cash. EDC provides your bank with a 100% guarantee on the required collateral.”

“If you’re looking to make an investment in the U.S, open an office or warehouse, create an affiliate, or take part in a merger or acquisition—there’s myriad ways we can help. All of the solutions that we offer, including the accounts receivables insurance and working capital, are available to the U.S. affiliates of Canadian companies,” said Weiner.

EDC has representation in various regions, including Atlanta, Chicago and Dallas, to help companies make connections with American buyers and partners and secure the capital to help finance your expansion plan. For more information, contact EDC’s U.S. team at support@edc.ca.

David Weiner is EDC’s regional vice-president for the United States and is based in Dallas, Texas.