As Prime Minister Mark Carney’s government continues to pursue economic partnerships with countries outside the U.S., the need for Canada to reach a new trade deal with its southern neighbour is only intensifying, an expert says.
“Every new (Canadian) trade deal seems to be bringing a certain amount of ire out of the U.S.,” Pierre Ouimet, head investment strategist at UBS Canada, told BNN Bloomberg in an interview Wednesday.
“We need to negotiate something solid with the U.S. at some point in time… this whole thing just creates an environment of uncertainty and that’s not really favourable when we’re trying to attract capital from everywhere in the world.”
Ouimet’s comments came after Carney announced on Tuesday that Indian Prime Minister Narendra Modi will be visiting Canada in December, when a new trade deal may be signed between Ottawa and New Delhi.
“What India is looking for is energy, that’s the main thing, and they want a secure supply as well, so Canada is on the top of the list,” Ouimet said.
“(It would be) another trade deal; what can I say, Mr. Carney has been pursuing trade deals left, right and centre and in the process, he keeps poking the bear, as we say.”
Last week, Carney attended European Commission President Ursula von der Leyen’s annual State of the Union address in Strasbourg, France, when she announced her intention to “open the door” for Canada to become the European Union’s (EU) first associate member.
U.S. President Donald Trump said such a move could be considered a “hostile act” and threatened to increase tariffs on the EU if a formal Canada-EU partnership is forged with “bad intentions.”
Tariffs not a ‘major threat’
As Canadian and U.S. negotiators remain at odds over a new trade deal, tariffs and counter-tariffs continue to weigh on Canada’s economy, but Ouimet argued that they are not “necessarily a threat” in the long term.
“I think most serious people agree that tariffs are not the way to go, unless it’s really specific in some industries with some obvious abuses, but overall, tariffs and the use of tariffs… I don’t think that’s a major threat,” he said.
“We’re already in the mix of it; how bad can it get? Can it really get worse?”
Still, Ouimet said a prolonged trade war with Canada’s largest and most important trading partner is not ideal for the country’s economy or its financial markets.
“A trade war with the U.S.,” he said, “is not exactly where we want to be.”
