Donald Trump has plans on signing an executive order that will restrict ‘Buy American’ exemptions for the federal government. It is a move that will change the current ‘Buy American’ rules, which states that the US federal government has to purchase American products from only American companies. Waivers will only be approved in some cases, which will ensure the purchase of foreign products.
It is the Canadian companies that gain from this rule, as they are the ones that are approved, and will be ones most affected by this executive order. The change in the rule is expected to face challenges from NAFTA, as Canada will look to block this ‘Buy American’ change in policy. The Trudeau government will really need to step up as they have failed to strengthen the Canadian economy.
The main problem is that Canada has no control over the United States, and the policies they implement. This means that the only way Canada can place itself in a position of strength is by strengthening its own economy. The key to doing that is by lowering taxes, and increasing the defence budget, which will strengthen the domestic economy, and make the government more efficient and effective.
However, the Trudeau government has failed to do that, and is currently doing the exact opposite of this, by increasing taxes, and cutting down spending on the military. This has made the Canadian economy extremely vulnerable to external shocks, which includes the potential damage it will face from the ‘Buy American’ policy in the US.
The only way to counter such radical policy changes is by ensuring that Canadian consumers have money to spend, because under the current government it is only getting worse. Unless the Trudeau government starts thinking about strengthening the Canadian economy, any US trade policy change is going to have a big impact on Canada.