Part 3/7:
One of the key issues driving investment abroad is the ongoing trade conflict with the United States. During the Trump administration, Canada was among only two countries — alongside China — that responded more aggressively to U.S. tariffs than the U.S. imposed on them.
The complicating factor is that the U.S. tariffs on Canada mainly targeted goods outside the scope of the USMCA (United States-Mexico-Canada Agreement). In retaliation, Canada's federal government under Prime Minister Trudeau chose to impose tariffs on goods covered by the USMCA, provoking the Trump administration into retaliating with a hefty 35% tariff on Canadian goods not covered by the agreement. This rate is one of the highest tariffs in the world, significantly hampering Canada's exports.