Canada Will Not Escape the Distortion in Global Trade Arising from the Agreement between China and the United States

According to the recent trade agreement between the two countries, the Chinese should increase their imports from the United States considerably over the next two years. This will lead to a distorting effect in global trade, as China is expected to in turn reduce its imports from other countries, including Canada. Canadian exports toward China could therefore end up seeing a cumulative decrease of US$5.6B over the next two years. The negative impact on Canada’s real GDP will nevertheless be fairly small.