McCarthy Tétrault recently held an event on the potential impact of the U.S. presidential election on Canadian businesses, focusing on themes such as retail and consumer markets, environment, energy, and tech, among other matters.

The panel of McCarthy Tétrault experts included Paul Zed, Counsel and Strategic Advisor; Awanish Sinha, Partner, Special Advisory; Debbie Salzberger, Partner, Anti-trust/Competition & Foreign Investment Group; Martha Harrison, Partner, International Trade & Investment Law and Retail and Consumer Markets Groups; and John W. Boscariol, Partner, International Trade & Investment Law Group head, and also featured a fascinating fireside chat with Steve Verheul, Canada’s Chief Trade Negotiator from 2017 to 2021.

The following is Part 2 of a two-part series highlighting key takeaways from our conversation.

Retail and Consumer Markets

Kamala Harris and Donald Trump have markedly different perspectives on trade remedies that impact retail and consumer markets. The Harris administration is expected emphasize environmental and consumer protection, including stricter regulations to ensure fair pricing and consumer safety. Harris has also proposed measures such as the first-ever federal ban on corporate price gouging, which would build on the anti-price gouging statutes already in place in 37 states. Conversely, Trump is expected to significantly cut regulations, aiming to reduce federal oversight and promote business growth.

1. The Manufacturing Hub

Harris is expected to build on the Biden administration’s progress to ensure American industries and workers thrive, with a focus on ensuring that manufacturing jobs return to and remain in the U.S. Harris’ platform emphasizes revitalizing manufacturing by creating jobs for Americans and ensuring that infrastructure projects use American-made goods. Similarly, Trump is also focused on boosting domestic manufacturing, aiming to improve overall corporate revenues and to support job creation. Trump plans to institute a four-year plan to enhance U.S. manufacturing which prioritizes American producers over foreign outsourcers.  

2. Impact on Canadian Producers and Exporters

With the possibility of de-harmonization of regulatory standards, Canadian producers, exporters and distributors must understand and adapt to the shifting landscape. This includes staying informed about changes in U.S. regulations and how they may impact cross-border trade. Canadian exporters should consider diversifying their markets and supply chains to mitigate risks associated with regulatory changes, and can leverage trade agreements to provide new opportunities.

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3. The Consumer as Collateral

Consumers should brace themselves for the inflationary consequences of restrictions on free trade, supported to different extents by both candidates. The biggest unintended victim of punitive trade measures is typically the consumer. To address increased border tariffs, for example, importers can cut costs in a variety of ways, including a reduction in their workforce. However, trade wars around tariffs invariably increase the price of goods, a burden that ultimately falls on the consumer.

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Other Considerations

Harris and Trump also have starkly differing approaches to the energy and tech sectors. Harris’ platform emphasizes expanding carbon neutrality, adhering to the Paris Accord, and implementing stricter regulations to hold corporations accountable for their carbon emissions.Trump intends to significantly roll back regulations and withdraw from major international climate treaties. He has advocated for the eradication of the Environmental Protection Agency, which would eliminate formal oversight of environmental protection and accountability for carbon reduction. In the tech sector, Trump is expected to favour a more hands-off approach to AI regulation with reduced federal oversight in the tech industry to foster domestic innovation and economic growth.

4. The Inflation Reduction Act and Bipartisan Infrastructure Law

As Vice President, Harris supported the Inflation Reduction Act (the “IRA”), which included significant clean energy spending and tax credits for electric vehicles. Harris is expected to continue implementing the IRA and the Bipartisan Infrastructure Law to ensure funds are used for energy transition. In contrast, Trump is expected to roll back certain sections like the tax credit for electric vehicles. Trump has also vowed to rescind all unspent funds under the IRA, potentially causing renewable energy projects to languish.

5. Oil and Gas Market

Trump’s focus on fossil fuels and boosting American oil and gas production could significantly impact Canadian oil’s share of the U.S. market. Exporting Canadian oil may face challenges under Trump’s policies, which prioritize domestic production and reduce reliance on foreign oil. Whereas a Trump administration might support new pipeline projects to enhance energy infrastructure, Harris is unlikely to do so for environmental concerns. The Democratic party platform also increased the royalties that oil and gas companies must pay to drill or mine on public lands. Harris’ administration is expected to continue this trend, focusing on reducing carbon emissions and investing in renewable energy sources.

6. Impact on the Tech Industry

The Harris administration has a more expansive approach to regulating tech companies, particularly those with significant market power or monopolistic tendencies. As such, Harris is expected to take a more traditional approach on big tech, advocating for stricter regulations to ensure data privacy, consumer protection, and fair competition. On the other hand, Trump is expected to focus on tech companies that he perceives as adversarial to his interests. Trump views these companies as content gatekeepers and is likely to push for regulations that address perceived biases and censorship.

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Please reach out to Martha Harrison for questions related to the Retail and Consumer Markets sector and Awanish Sinha for other regulatory matters.