The latest breakdown in Canada-U.S. trade talks reflects a dispute that extends beyond tariffs, with broader implications for Canada’s economic independence and ability to set its own policies, according to one University of Lethbridge political science professor.
However, Yale Belanger said it is starting to feel like the old Bill Murray movie Groundhog Day.
“We wake up every day to a new set of demands, but nevertheless a set of demands,” Belanger said.
He said he agrees with Prime Minister Mark Carney’s decision to step back from negotiations, adding he expects the situation to worsen before it improves.
The United States imposed 50 per cent tariffs on roughly $28 billion in Canadian goods after negotiations broke down. Canada announced matching tariffs on U.S. goods that will take effect Sept. 8.
But Belanger said the dispute extends beyond tariffs and trade, pointing to U.S. demands involving Canada’s trade relationships and French-language policies.
“It’s not just about trade. It’s a fight over how we in Canada make our decisions,” he said.
Belanger said the trade dispute also raises questions about Alberta’s separation debate, particularly as the province considers a referendum on the issue.
He said the prospect of Alberta separating from Canada would raise questions about its relationship with the United States at a time when U.S. President Donald Trump is pursuing greater access to Canadian resources and has repeatedly raised the idea of Canada becoming part of the United States.
“The separation debate here in Alberta, unfortunately, is a destabilizing element and it’s unfortunate in terms of its timing,” Belanger said.
The professor also said Canada’s energy resources could be used as leverage in the dispute, arguing the federal government should consider the national security implications of Canada’s energy exports.
He pointed to Canada’s importance as an energy supplier to the United States. Canada supplies about 60 per cent of U.S. crude oil imports and more than 99 per cent of U.S. natural gas imports, according to Natural Resources Canada.
For businesses and consumers, Belanger said the effects of the trade war could become more apparent over time as tariffs raise costs and disrupt supply chains.
He said the economic fallout from the dispute could also become a political liability for U.S. lawmakers as voters head to the polls for November’s midterm elections.
A Reuters/Ipsos poll published Aug. 17 found that 33 per cent of Americans approved of Trump’s performance, while 64 per cent disapproved. The poll also found Democrats gaining ground on Republicans on economic issues ahead of the midterm elections.
Belanger said political pressure in the United States could eventually change the tone of the trade dispute, particularly if Democrats make gains in Congress.
Although the future of CUSMA is unclear, Belanger said it is too early to conclude that the trade agreement is finished.
“I think it might be in a stasis and a holding pattern,” he said. “We’ll just have to see how this all unfolds in the next few months because we have a very erratic individual who is the President of the United States, and he is ultimately controlling the pace of all these negotiations.”
CUSMA underwent its first mandatory joint review this year. The review took place July 1 and is not an automatic expiry date for the agreement. Under the agreement, the parties review its operation and decide whether to extend its term for another 16 years.
Belanger said the current dispute could ultimately force Canada to diversify its trading relationships rather than rely so heavily on the United States.
Belanger said strengthening commercial ties with Europe, the United Kingdom, Australia and other markets could give Canada more options and reduce its dependence on the United States.
He said the outcome could depend in part on the political situation in Washington and whether the Trump administration eventually returns to the negotiating table.
