US President Donald Trump is planning to sign an executive order to restrict “Buy American” exemptions in the federal government.
Under current “Buy American” rules, the US federal government must use American products and American companies for most purchases. Waivers are granted in some circumstances, which allows the purchase of foreign products, or the use of companies that have foreign suppliers.
Canadian companies are often granted exemptions, but that could be put at risk by the upcoming US executive order.
The changes could conceivably face NAFTA challenges, but Canada is unlikely to have the leverage to block change in US “Buy American” policy.
That means we need to focus on strengthening our domestic economy, something the Trudeau government has so far failed to do.
Lower taxes to boost consumers
We can’t control what the United States does. However, we can control how competitive our economy is. Lowering taxes, increase defence spending – building a stronger homegrown Canadian defence industry – and making government more cost-effective and efficient, will all strengthen our domestic economy and help us compete.
But on all of those measures, the Trudeau government is doing the opposite of what common-sense would dictate.
They are increasing taxes (including the carbon tax that will devastate our competitiveness), cutting the military, and allowing the bureaucracy to become larger and more bloated than ever.
This makes us incredibly vulnerable to external shocks – including potential damage from a change in “Buy American” policies in the US.
Unless Canadian consumer have more money to spend, our vulnerability will only get worse, and all of us will pay the price.