April 30, 2025
With a new U.S. president in office, tariff threats, supply chain disruptions and mounting protectionism, the global economic landscape is changing before our very eyes. The impact on Canadian businesses is very real and is forcing them to re-evaluate their strategies.
“In the 1980s, neoliberalism and multilateralism were the cornerstones of the global economy. But the geopolitical tensions we’re seeing now are making us rethink the whole system,” explained Philippe Bourbeau, Co-Director of the International Institute of Economic Diplomacy at HEC Montréal. This was the jumping-off point for the Rendez-vous ED x IIDE discussion, the theme of which was “Strained Canada–U.S. Trade Relations: What’s Next for Canadian Businesses?”
The event, a joint initiative of the Institute and Executive Education HEC Montréal, was held on March 27, 2025. It served as a forum for top experts and business leaders who are navigating this increasingly complex environment to share their thoughts and insights. The speakers on the panel were:
- Robin Bernstein, former Ambassador of the United States to the Dominican Republic, President, Richard S. Bernstein & Associates Inc.
- Jérôme Pécresse, Chief Executive, Aluminium, Rio Tinto
- Anne-Marie Trudeau, CEO, Trudeau Corporation
- Pierre Seïn Pyun, Vice President, Government and Industry Affairs, Bombardier
- Louis Bouchard, President, STAS and QG100 member
- Mélanie Raymond, Acting Chief Economist and Director General of International Economic Relations, Global Affairs Canada
- Véronique Proulx, President and CEO, Fédération des chambres de commerce du Québec (FCCQ) — moderator.
“The system that we’ve worked in for decades is showing its cracks and starting to fall apart. But something else is emerging from the rubble,” said Bourbeau. “So where does that put us and where are global trade relations headed?”
Free trade agreements: A boost to economic growth
Although doubts are being raised about the Canada–U.S. –Mexico Agreement (CUSMA), free trade agreements (FTAs) are known to be an economic stimulant. “Within 10 years of a deal like this being signed, trade triples,” explained Mélanie Raymond, Acting Chief Economist and Director General of International Economic Relations, Global Affairs Canada. CUSMA, which was renegotiated in 2020, is no exception. Since it came into effect, Canadian exports to the U.S. and Mexico have grown by 35% and 38% respectively.
However, Raymond pointed out that even though many Canadian businesses leverage the benefits of CUSMA, there are still untapped tariff savings of $1.5 billion on imports from the U.S., and $217 billion on imports from Mexico. These amounts could be used to help organizations mitigate the impact of tariff hikes. And given that Canada currently has 15 FTAs with countries around the world, there are many possibilities to explore. “It’s not exactly easy to put all this in place, but that’s exactly why we have a Trade Commission Service. It provides support to Canadian companies as they break into new markets,” said Raymond.
Facing the headwinds
“The only certainty these days is uncertainty,” said Jérôme Pécresse, Chief Executive, Aluminium, Rio Tinto. As one of the world’s leading aluminum producers, Rio Tinto has found itself caught in the middle of the tariff turmoil. “Half of our global production is based in Canada, mainly in the Saguenay area of Quebec, but also in British Columbia. And 80% of Canadian-produced aluminum is made specifically for the American market.”
Even if these figures were to change, Quebec would continue to be competitive, as the U.S.’s 25% tariff on aluminum applies across the board to all countries.
“Aluminum is electricity in solid form,” said Pécresse. “And our hydro is very competitively priced. I’m constantly reminding my U.S. colleagues that, when we sell them aluminum, we’re not exporting anything that’s government-subsidized. We’re just letting them take advantage of the low price of our hydro power. The idea isn’t catching on just yet, but I hope it’ll change.”
Weaning off reliance on trade
Pierre Seïn Pyun, Bombardier’s Vice President, Government and Industry Affairs, explained that the Canadian economy’s dependence on trade with the U.S. is a problem. That is why he is a strong advocate for such tools as industrial policy, which would help structure the economy and make it possible to weather the crisis more effectively. He explained that the subject tends to be taboo in Canada, but other countries are increasingly turning to this solution.
“There’s a momentum building to develop an industrial strategy as a means to protect national security. A number of industries could be involved, like aerospace, telecommunications, finance and AI. So we have to ask ourselves where we want to develop our sovereign capabilities,” he added. By adopting these strategies, he believes Canada would carry more weight in global markets, rather than being a mere link in the value chain.
The organizations represented at this discussion also argued for better government support and swift CUSMA renegotiations when the agreement comes up for review in 2026. They also said they hoped their U.S. counterparts will actively speak out in defence of trade relations with Canada.
Strength through reinvention
The current economic crisis is an opportunity for organizations to diversify, not only by shifting their focus to markets in Canada and other countries around the world, but also by exploring other products,” added Louis Bouchard, President, of STAS, a company that does business in over three dozen countries.
“We have to ask ourselves: Is what we do transferable to other markets or other applications? In our case, our main focus is on the manufacture of machinery for the aluminum industry, but could we apply it to titanium, copper, scandium? Could we set our sights on the naval industry?”
Pécresse agreed with his take, saying that his own mining group could pivot toward critical minerals, another area where Canada is poised to become a significant global supplier.
Agility and resilience
Trudeau Corporation CEO Anne-Marie Trudeau emphasized that agility is the watchword in today’s business environment. Her company designs kitchenware and houseware products in Canada and sells 60% of its wares to the U.S.
“It’s a complex situation. Our products are manufactured in China, and our partners refuse to accept the tariffs being imposed by the U.S. They’re going back to their suppliers and asking them to absorb the increase. So we’re in a constant back-and-forth right now with them and our customers.”
She explained that she is preparing for several different scenarios. “Our team is coming up with plans and tweaking them on an ongoing basis. We have no choice but to be resilient, open to communication, responsive and supportive to our employees and suppliers, who are definitely on edge. But I’m still confident there will be new opportunities arising from this crisis.”
The importance of maintaining bilateral relations
Robin Bernstein, the former Ambassador of the United States to the Dominican Republic, also spoke at the event, stressing the importance of the relationship between the U.S. and Canada. “Even during times of political and economic upheaval, we’ve relied on each other and cooperated on things like national security, education, business investments, crime and drug control, climate change and natural resources.” In addition to these essential issues, she emphasized the strong economic ties, with billions of dollars of trade between the two.
Bernstein pointed out that both countries are worried about overreliance on China, especially when it comes to batteries and critical minerals. “Our nations have more in common than we do not, and collaboration is paramount for tackling global challenges, especially those posed by China.” She recommended that Canadian businesses work actively with the U.S. embassy to ease entry into the U.S. market, deal with the regulatory red tape and scope out investment opportunities and risks.
The value of working together
In her recap, event moderator Véronique Proulx, President and CEO of the Fédération des chambres de commerce du Québec, said that the message delivered by the speakers was one of support and partnership, and served as a reminder of the value of working together. “In every crisis, there are opportunities,” she stated. “I hope that we can all turn these opportunities to our advantage in order to ensure our economy remains resilient over the long run.”
This edition of Rendez-vous ED x IIDE was made possible through the support of Global Affairs Canada, the Caisse de dépôt et placement du Québec, Investissement Québec and the Conseil des relations internationales de Montréal.
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