Canada has suspended trade negotiations with the United States, Prime Minister Mark Carney said, after last-minute changes to Washington’s proposed terms were deemed “unfair” and “uneconomic”, a day after US President Donald Trump had said that US "should be able to have a deal with Canada."
That is true, but shipping at sea is not that expensive, there’s a reason Japan could capture car markets in both USA and Europe already in the 60’s from factories in Japan.
Trade with EU and China each have the same economic potential as USA.
Trade relations need to be built, and that takes time. But there is a strong potential for growth in global trade between Canada and other countries in the world than USA.
You say look at a globe, I live in Denmark, and USA is the biggest export market for us. So it is possible to have very significant trade across the Atlantic.
Part of that trade btw is shipping itself, where Mærsk the biggest global container shipping company in the world is headquartered in Denmark.
Sea shipping is incredibly efficient which really helps make such surprising things possible with a strong enough comparative advantage. That said, it’s still an added friction, does take time and adds in some more risks. Being close counts for quite a lot if that trade is more or less freely allowed.
Looking at this World Bank data for Denmark in 2023 (latest year it was tabulated for), it actually has next door big neighbor Germany as getting ~13.7% of Denmark’s total exports followed by Sweden, the Netherlands and Norway before getting to the US’ ~5.0%. Somewhat more distant European heavyweights like the UK, Poland and France follow not terribly far behind before you get to enormous economy China. Swap it to import and again neighboring big economy Germany is providing a whopping ~20.3% followed by Sweden and the Netherlands before you get to China’s ~6.5%, then Poland, then the US’ ~4.6%. Not far behind trails Norway at ~4.5%. So Norway has a relatively similar share of Denmark’s trade going either way compared to what the US has, despite having an economy multiple hundreds of times smaller than that of the US. That proximity really helps!
The US in the same data is importing roughly the same ~14% share from each of neighboring Mexico and Canada as well as giant super focused on exporting China, and going the other way US exports are double to both Mexico and Canada what they are to China. Despite the Mexican and Canadian economies even combined together being like a fifth of China’s economy.
Also most of Canada’s population is distributed pretty near to the very lengthy border with the US, intermittently broken up by challenging terrain and only a comparatively small fraction is coastal. This has had the effect of encouraging parallel north-south trade corridors going across the border. If those flows instead are directed east-west to Canada’s ports which are also already stretched then the existing infrastructure can also potentially be limiting even with Canada signing a ton of amazing trade deals. Check out this picture of Canada’s road networks and see that there are some rather surprising bottlenecks.
All that said Canada should absolutely seek the best trade deals it can get with as many countries as possible in the circumstances. But I think it may be difficult to find enough low-hanging fruit still left to make up for such a huge gap, surely if it were that easy to expand trade so massively it wouldn’t have been ignored prior to this point of crisis?
Very informative, maybe what I heard was that USA is the biggest outside EU. But in this regard it should also be considered that EU has completely frictionless trade, it’s almost like selling between 2 states in USA. So that is also a huge factor.
But I won’t deny that a huge wealthy economy right next door is the obvious trade partner. But when that economy is governed by madness, shipping by sea is absolutely an option. How else would an island economy like Japan be able to be one of the leading economies in the world?
Mark Carney also clearly expressed that Canada is in a way better situation today than 18 months ago in negotiating with USA, very much because Canada has made multiple new trade agreements.
Traditionally however there hasn’t been much shipping from Canada to these trade partners, because for some reason that transport has gone through USA, which is not an option anymore. So these shipping lines need to be established, and maybe Canada even needs new port facilities and transportation hubs for this new expanding trade to not have to pass USA, which should absolutely be avoided in case of US tariffs.