US president Donald Trump is determined to push his administration's trade policy overhaul trade between Canada and the United States has reached such a point that the question is being asked aloud it got many there thinking with friends like that who needs enemies will Canada abandon the United States for its vehicle and metal exports and deepen its ties with the European Union we want to make it very clear that if you pick a fight with us we're going to fight back one Canadian member of parliament even went so far as to say if Trump's threats continue
we will impose a 100% tariff on Elon musk's Tesla our retaliation is going to be a lot more surgical than that I have proposed a 100% tariff on all Teslas but can they really go that far how realistic is it for Canada to turn to the European Union as an alternative let us take a look at the consequences of all this tension for highways metal factories and even Brands like Tesla we will now shed light on the answers to all these key questions before we start you can support us by subscribing to our Channel and
turning on notifications for many years Canada has been the closest trading partner of the United States from automobiles to Steel aluminum to dairy products they shared an enormous volume of trade however the recent protectionist approach in Washington has backed Ottawa into a corner the United States leader shocked Ottawa by declaring I could impose tariffs of up to 100% on Canadian vehicles and metals not only that there are some who say if this does not work we can consider more in response the Canadian side declared if you treat us in this manner we will impose the
same tariffs on American brands the most shocking Target appears to be Tesla a senior Canadian politician created a big stir by saying we will retaliate surgically we will put a 100% tax on Trump's favorite brand Tesla the reason Tesla is singled out is straightforward this brand is one of the Pinnacles of the American Electric Vehicle Revolution and Carries High symbolic value the logic is that if we target Tesla it will spark considerable uproar in United States domestic politics hence this is seen as a move to strengthen Canada's bargaining position in the automotive market yet can
Canada really shift to deeper cooperation with the European Union this is the most vital question looking at Canada's trade data the United States remains its largest and nearest market logistically the two countries are neighbors and their billion dooll flows in the automotive and metal sectors continue the concern is it actually so easy to walk away from the United States is not unfounded even so according to Canadian media Ottawa says our hands are not tied in a potential trade War because we already have a comprehensive agreement known as CA with the European Union while the European
Union is geographically distant it is not governed by protectionist measures some voices in Europe add trade agreements between the European Union and Canada are far preferable to the tariffs suggested by Trump nevertheless analysts acknowledge that it would be difficult for the European Union Market to completely substitute for the United States Transportation costs varying standards and physical distance are significant barriers still Canada hopes to demonstrate that it has a ready Plan B it is pursuing stronger relations with Europe particularly in metals to see if it can balance out any tax Blow from the United States is
this a bluff it is undoubtedly a formidable diplomatic card if Washington believes Canada has no Alternatives it would be mistaken while Canada might not stise completely partly opening up to the European Union could offer Canada some relief Tesla plays a distinctive role in this potential trade war and tariff conflict its inclusion in this Clash is no accident Tesla is emblematic of United States technological innovation at the same time it has found a serious customer base in Canada and had even been discussing the possibility of producing or obtaining raw materials there now Tesla faces the threat
of steep tariffs should retaliation be enacted Tesla's Canadian prices could soore and sales might abruptly stall this would not only damage the Brand's share in North America but also prompt debate in United States domestic politics why is there such a dispute with Canada Tesla's backers carry substantial political clout Canada is also a country endowed with abundant mineral resources minerals critical for electric vehicle batteries such as lithium and nickel are located here companies like Tesla had planned to shorten their supply chains by sourcing these minerals from the United States side of the Border because of emerging
tensions this possibility is threatened Canada is a essentially stating if you impose a 100% tax on me I will respond to your automobile industry and sell these resources elsewhere automobile manufacturing is a vast puzzle certain components are produced in Canada others in Mexico or Asia steel and aluminum might come from Canadian facilities possibly destined for assembly in the American Midwest eventually the completed automobile might be sold back in Canada this cycle is a Cooperative process on both sides of the Border if an extreme tax of 100% is introduced that entire structure crumbles manufacturing expenses Surge
and consumer prices do the same American consumers would react why did a car's price Jump by $5,000 or $10,000 Canadians would lament we have been forced to shut down factories and unemployment has soared both sides could emerge as losers still some seem propelled by calls for National Security or protectionism on the Canadian side the answer to where else could we sell our Goods besides the United States might be the European Union or Asian market Asia however is far away and there are no free trade agreements with countries like Korea Japan or China the European Union
seems more promising under the comprehensive economic and Trade Agreement therefore the guiding idea is let us strengthen our ties with Europe which may compel the United States to negotiate could European Union Canada Co operation counterbalance American influence the comprehensive economic and trade agreement is an ambitious pact that largely eliminates tariffs between Canada and the European Union ideally it aims at free trade although there are certain complications in the path to full realization if Canada sets its sights on Europe for its metals and Automotive exports it may have to contest with numerous producers the advantage is
that the European Union does not impose steep tariffs on Canada Canada weary of arbitrary tariffs may say at least here we do not face such barriers moreover the European Union's population of nearly 500 million people constitutes a massive Market nonetheless it is not as convenient or approximate as the United States transport costs and shipping time both rise even so from Canada's perspective it is a method of responding to the American stance in sectors such as steel and aluminum there is discussion of potential collaboration between Canada and the European Union for instance green steel initiatives and
low carbon output under this Vision Europe and Canada could collaborate on more sustainable Concepts if the United States get stuck in protectionism both Canada and the European Union might develop a joint block approach in that scenario Canadian Automotive Parts could appeal to European Union manufacturers German or French vehicle Giants might consider acquiring metals and components from Canada effectively bypassing the United States yet the tension between Canada and the United States does not only affect these two Nations Mexico is also involved given that the North American automotive industry is closely integrated under what was previously known
as NAFTA and is now called the usmca steel aluminum and car parts Traverse borders continually if steep tariffs were slapped on Canadian Vehicles Mexican factories would also bear the repercussions the European Union might respond if Trump pushes Canada this far we will expedite new negot iations with Canada some European leaders might say accelerating a possible partition of global trade blocks this could signal a fresh global trade War Canada alludes to this point global trade has entered a new phase and I do not stand alone in the near term fully walking away from the American Market
poses excessive risks for Canada proximity to that market is immensely valuable and Geographic adjacency is a major advantage however turning to the European Union as plan b stands as an alternative although it will not be easy because of fierce competition in Europe elevated shipping costs and the lack of a simple substitute for the United States Canada is sending the message do not underestimate me there is always the door to Europe this statement is a pivotal bargaining tool in diplomatic discussions trade Wars can produce a multitude of losers and few winners a protracted dispute could harm
consumers in both Canada and the United States prices could rise plants might close and political tensions would deepen consequently the typical resolution is compromise there was a similar crisis around steel previously and after imposing retaliatory tariffs the two sides found Middle Ground possibly we will see a scenario where Canadian car exports will not face the full 100% tariff while the United States attains certain benefits it desires meanwhile Canada may not fully deploy its Tesla tax or may implement it in a restricted manner however it is obvious that the dispute is not going to disappear in
the immediate future which scenario is more likely that Canada would truly abandon the United States and pivot to Europe or is this merely a bluff for bargaining leverage and might Tesla be caught in the middle ultimately suffering painful consequences thank you for tuning in please do not forget to subscribe to our Channel turn on notifications and press the like button we might soon see the next round of this automotive and metal conflict goodbye
