There was not much economic reassurance after yesterday’s meeting between Canada’s Prime Minister Justin Trudeau and U.S. President Donald Trump. Today the C-D Howe Institute predicted that a proposed U.S. border adjustment tax (BAT) would reduce Canada’s real GDP by almost one percentage point.
The think-tank also says a BAT would drive up the value of the U.S. dollar and undermine the competitiveness of U.S. export businesses.
It’s not known whether the two leaders discussed the BAT at their meeting.
Uncertainty about crucial trade
There continues to be grave economic concern after Trump said he would tear up the North American Free Trade Agreement if elected. Trump was not much more specific yesterday than to say that trade with Canada needed “tweaking.”
Seventy-five per cent of Canada’s exports go to the U.S. and the two countries trade more than two-billion dollars a day.
The report from the C-D Howe Institute is the latest in what is sure to become a steady stream of reports on the dangers of impeded trade between the two countries.
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