Canadian Manufacturing

Trump sure to claim victory on USMCA, impeachment in state of the union [UPDATED]

One expert says the political uncertainty and upheaval that has marked the last three years isn't going away any time soon

February 4, 2020  The Canadian Press

WASHINGTON — It was once among the most predictable spectacles on the American political calendar — but with Donald Trump on the dais, there’s as much suspense surrounding the Feb. 4 state of the union address as there is in the race to choose his Democratic challenger.

Still, there are two safe bets: a victory lap on trade, with plenty of crowing about the U.S.-Mexico-Canada Agreement (USMCA), and more than a few volleys at the president’s political rivals.

Perrin Beatty, president of the Canadian Chamber of Commerce, says he’ll be listening for evidence of stability on the trade file, as well as details of the so-called second phase of a trade deal with China, although he admitted he’s not holding his breath.

Even with the replacement deal for NAFTA now largely complete, pending ratification in the House of Commons, Canadian industry is smarting from how it was treated during the negotiations, the former Progressive Conservative cabinet minister said in an interview.


Canadians had every reason to expect the talks to reflect the importance of the trading relationship between the two countries in defending North America’s shared industrial base from the mounting threat of global rivals.

“Instead, what we saw was an approach … (that) treated Canada and Mexico as if they were the enemy, rather than partners, and the approach was zero-sum. It wasn’t, ‘If we get a good deal, everyone can win,’ it was, ‘One of us can win only if the others lose,”’ Beatty said.

“The net impact of all of that is to cause Canadians to be more cautious — to say, for reasons of self-preservation, ‘We need to diversify, not have so many eggs in one basket.’ And that’s a problem the U.S. has with allies and trading partners around the world: that often the people whom they most need have been targeted at one time or another and are feeling a bit gun-shy as a result.”

Beatty was in Washington this week for meetings of the so-called B7, the official business advisory group to G7 countries. This year, the focus of the meeting is on fostering international trade and defending multilateral institutions like the World Trade Organization, which have long been in the Trump administration’s sights.

The Canadian chamber’s priorities at the meetings this year include digital trade and e-commerce, as well as the issue of foreign subsidies for domestic producers and state-owned organizations that distort international trade metrics — long a complaint about China, which promised a year ago to bring its programs into compliance with WTO rules.

Phase 1 of the U.S.-China trade deal, which Trump and China’s Vice-Premier Lieu He signed at a White House ceremony last month, includes improved protections for U.S. intellectual property and commits the U.S. to buying some $80 billion in agricultural products over the next two years. In exchange, China will buy $78 billion in U.S. goods, $52 billion worth of oil and gas and $38 billion in financial and other services.

Critics say it falls well short on thorny issues like subsidies and companies’ links to the Chinese government, including tech giant Huawei and the danger it is said to pose to U.S. national security.

In addition to his self-proclaimed trade wins, Trump likely believes he has other reasons to celebrate during the state of the union.

He could well declare an early victory in his impeachment trial, even though senators won’t pass final judgment on the case against the president until Feb. 5. Acquittal is all but assured, since a two-thirds majority is required to remove a sitting president and Republicans hold 53 of the Senate’s 100 seats.

And he may be unable to resist needling the Democrats over the debacle in Iowa, where the results of the Feb. 3 caucuses were still nowhere to be seen by midday Feb. 4 thanks to technological and administrative snafus.

Related: Red-faced Democrats struggle to announce caucus results

Regardless who ends up in the White House after November, the uncertainty and upheaval of the last three years might not go away, Beatty warned.

“There’s been an isolationist strain, a sense that Americans are being victimized by the rest of the world, that they’re being asked to carry too much of the burden, that they’d be better off sealing themselves off from the rest of the world and focus on their domestic situation,” he said.

“That’s not new. It is coming back with some force, and I don’t think we can assume that that impulse disappears when there’s a change in administration.”

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