President Trump: Canadian Agriculture Will Have to Adjust

You gotta love our American friends.  There is no other country in the world that has to react to our American friends like Canada does.  Sharing the North American continent with the richest country in the world has been a huge benefit to Canadians throughout our history.  Our ancestors might have not felt that way back in the days of the War of 1812, but in 2016 the world is a whole different place.  Last Tuesday our American friends went to the polls to decide the direction of their nation.  Canadians looked to the south are holding their breath.

It was different this time because of GOP candidate Donald Trump.  In the past you might have seen an American political candidate call himself a maverick, but we’ve never really quite seen anybody like Trump.  He is a businessman, who became even more famous as a reality television star who has completely redefined the 2016 presidential race.  Initially, he used his entertaining celebrity to slay all of the Republican candidates before turning toward a showdown with Hillary Clinton.  He burned a lot of bridges along the way with women, people of color, Hispanics and others offering his own kind of colourful American populism.  To the world, he was entertaining, but also a bit of a nightmare.  However, we all knew he’d never elected.

A DTN reader once told me that Canadian understanding of Americans is a mile wide and an inch deep.  In other words, I was told that as a Canadian, it was pretty hard for me to understand Americans.  In my early days, I was pretty hard on my American friends especially when it came toward their agricultural policy.  I called American agricultural policy toward Canada brutal, among other things.  I’m sure there were even a few times where those lines were blurred between me criticizing policy and criticizing the American people themselves.  That all changed when my American readers took me to task for my prejudiced Canadian views of the United States.  Since that time, I’ve grown older, hopefully wiser and much more fair in my consideration of our American friends.

Of course, nobody really expected a President Elect Donald Trump.  I had looked at the polls and had expected the next President of the United States to be Hillary Clinton.  However, the polls were so wrong and Donald Trump won a resounding victory in the US Electoral College.  Hillary Clinton won the popular vote.  Having a President Trump was a shock to many.

Of course the question that many people are asking is what affect will the outcome of the US presidential election have on our markets.  In my mind, a Trump victory would always mean a drop in the US dollar and a corresponding gain in the Canadian dollar.  After some initial volatility with election night markets, that has not happened.  The US dollar is up and the Canadian dollar is down.  Mr. Trump’s conciliatory messages post election might have helped.

Of course, we’ve also seen during the American election campaign concentrated attacks on trade agreements like NAFTA and the TPP.  Both Donald Trump and Bernie Sanders during this election campaign have criticized heavily these trade agreements.  In fact, Donald Trump has said that they will be renegotiated or torn up completely. Bernie Sanders during the Democratic nomination was saying much of the same thing.  It has led to Hillary Clinton tacking to the left of the political spectrum recognizing that many Americans do not like some of the job losses that have come from these trade agreements, especially to places like Mexico.  It may have cost Hillary Clinton the election, as rust belt states rejected her.

What this means for Canada is pretty obvious.  Canada is a trading nation and both Liberal and Conservative governments have signed free-trade agreements like NAFTA and CETA.  However, we all know as Canadians, Americans deem free trade to be whatever they want that to be.  If an American President with congress does not like a trade agreement, it’s pretty well dead.  President Elect Trump has said no to NAFTA, TPP and the Paris Climate Change agreement.  I have no inclination to doubt he will follow thru.  The country with the biggest military and the biggest economy always wins and that’s why the trade initiative like TPP will not see the light of day post Jan 20, 2017.  For those agricultural interests in Canada who thinks otherwise, it’s time to regroup, this is our new reality.

So, as I said before, you gotta love our American friends.  Every four years they turn into the Excited States of America.  Last Tuesday changed everything and you can bet, the future will be something you could have never imagined.