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Trump’s USMCA exit threat seen pushing Canada into China’s arms ‘as a hedge’
Analysts expect Ottawa to diversify trade as future of North American trade pact remains uncertain, while a US departure would ‘hit Canada like an earthquake’
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A reported threat by US President Donald Trump to withdraw from the North American trade pact could push Canada closer to China, analysts say, even as his new global 15 per cent tariff has little immediate impact due to existing trade agreements.
Washington, Ottawa and Mexico City are set to renegotiate terms of the US-Mexico-Canada Agreement (USMCA) before a possible extension on July 1. Earlier this month, Bloomberg reported that Trump was quietly considering exiting the trade deal – negotiated during his first term to foster deeper economic integration – citing unidentified sources.
Weighing in on the potential impact, Salvatore Pinizzotto, co-founder and managing director at Xida Communications in Italy, said: “Canada would almost certainly accelerate selective diversification, and China would be part of that – not as a substitute for the US, but as a hedge.”
And Stephen Olson, a former US trade negotiator and a visiting fellow at the ISEAS – Yusof Ishak Institute, said that a US departure from the trade pact would “hit Canada like an earthquake”.
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