The Canada-United States-Mexico Agreement (CUSMA) will survive a second Donald Trump presidency.
That’s according to Lewis Lukens, senior partner at Signum Global Advisors.
“Canada and Mexico are safe,” he said in remarks delivered at the Portfolio Management Association of Canada’s 2024 conference in Toronto on Tuesday.
The retired U.S. diplomat and former U.S. Consul General in Vancouver said to watch for Robert Lighthizer, who served as U.S. Trade Representative in President-elect Donald Trump’s first term, to be back in a senior capacity.
“He will continue to have a key role advising Donald Trump on trade,” Lukens said. “He is very proud of the work they did renegotiating NAFTA [the North American Free Trade Agreement] … he called it one of the greatest accomplishments of Donald Trump’s first term. I don’t see Trump and Lighthizer turning their backs on the U.S.-Canada-Mexico trade agreement.”
The European Union and China are more likely to be on the receiving end of protectionist trade measures under a second Trump presidency. “Donald Trump is just itching to impose tariffs on the E.U.,” Lukens said.
Asked which industries stand to benefit from Trump’s return to the White House, Lukens listed financial services, which will benefit from regulatory reform, and the defence sector.
On the health care front, Lukens doesn’t believe “Obamacare writ large gets overturned or repealed.” He suggested the new administration will be less aggressive negotiating drug prices with pharmaceutical companies, which will benefit that industry.
The energy sector will benefit too, “except for solar and wind — I think they’ll probably take a bit of a hit,” he said.
In an interview with Investment Executive, Lukens said Prime Minister Justin Trudeau should “reach out early and often” to the president-elect. And he warned that “any attempts to tighten labour and environmental standards would probably not be met well by Trump.”
Our oil and gas resources provide Canada an edge in trade negotiations. “Those are sectors that are near and dear to President Trump’s heart,” Lukens said. “That’s a strong point for Canada.” But Trudeau should avoid promoting renewable energy technology. “That is an area that Donald Trump really doesn’t care about.”
Lukens said there is reason for investors to be optimistic about a second Trump administration’s ability to rebuild the U.S. manufacturing base. “Some of the investments, from the Inflation Reduction Act and the CHIPS [and Science] Act, are putting huge amounts of money into manufacturing in the United States,” he said. “So, yes, I think it is possible. And it is happening.”
Lukens also said Trump’s second term could be more effective than the first, but only if the president-elect stays on task.
“That’s always the wild card, right? Donald Trump is undisciplined,” he said. “But I think the people around him will be focused on that. His chief of staff will be Susie Wiles, who ran his campaign. She herself is very disciplined. She ran a very effective and disciplined campaign, clearly, because he won. She is going to work very hard to keep him on-message and disciplined.”