Can Canada Offset Trump's Tariff War With More Domestic Trade?

New York Times

10 hours ago

When Mark Carney became Canada's prime minister in the spring, he offered a seemingly simple and obvious answer to the economic threat posed by President Trump's tariffs on Canadian exports: Trade more within Canada.
To that end, Mr. Carney, the leader of the Liberal Party, promised to eliminate rules and laws that stifle the movement of goods and many workers inside the country by July 1, Canada Day, after decades of national hand-wringing over the issue.
Mr. Carney, a rookie politician and former central banker, met his goal after his government pushed a bill through Parliament last week meant to do away with trade and other barriers under federal control.
'We will give ourselves more than any foreign nation can ever take away by building one Canadian economy — the strongest economy in the G7,' Mr. Carney said in a statement, referring to the Group of 7 leading industrialized nations.
But a major hurdle to building a stronger national economy remains: Canada's 10 provinces and three territories have created their own rules and regulations that inhibit internal trade and, taken as a whole, those are considered a bigger obstacle than the federal barriers.
Economists generally agree that fully opening trade within Canada is good policy. But there is also broad consensus that the country's vast size, its relatively small market of 40 million people and the globalization of manufacturing mean that it is unlikely to replace the U.S. market for Canadian goods anytime soon.
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