Trade war lobbying ‘all-consuming and exhausting,’ but we are ‘made for moments like this,’ say lobbyists

Advocacy groups dealing with an “exhausting” and “frustrating” trade war with the United States that's gone on longer than many expected also say they are needed more than ever, and that it’s their time to shine as they lobby on behalf of Canada’s hard-hit sectors.

“It's kind of all-consuming and exhausting, but it is at least intellectually stimulating to try to sort out what is needed and how to go to bat for our members properly,” said Dan Kelly, president and CEO of the Canadian Federation of Independent Business.

“This is the central issue right now, and we've had to move aside other fairly critical files to try to put [the trade war] on centre stage.”

The Canada-U.S. trade war escalated following the collapse of bilateral trade talks on Aug. 21, leading to U.S. President Donald Trump imposing a 50-per-cent tariff on roughly $27.6-billion of Canadian imports on Aug. 22, including dairy, alcohol, and agricultural goods. The tariffs even apply to goods compliant with the Canada-U.S.-Mexico Agreement, and have no expiry date.

Ottawa retaliated with dollar-for-dollar counter-tariffs covering about $27.6-billion in U.S. imports, set to take effect on Sept. 8. The breakdown of the trade talks was attributed to terms proposed by the U.S. that were “uneconomic, unfair, and undermined the net benefits to Canada,” said Prime Minister Mark Carney (Nepean, Ont.) during an Aug. 22 press conference.

Kelly told The Hill Times that his organization’s message to Ottawa is that, as Canada embarks down a path that includes retaliatory tariffs, there needs to be support for independent businesses, adding that there were “worrisome statistics” even before the trade war. The organization’s advocacy in recent months has included warning the feds about an “entrepreneurial drought” showing a trend of more businesses closing than opening in recent quarters, as previously reported in The Hill Times.

Navigating the trade war has not been simple, according to Kelly, adding that the current dispute is not normal. He said that advocating on behalf of Canada’s small and medium-sized businesses during the trade war has brought on his “PTSD from the pandemic emergency.” The COVID-19 pandemic was also a crisis where huge swaths of Canada’s smaller businesses faced shutdowns over a period of years, he said.

“There are some parallels here in that it's a sudden emergency, an external threat, and nobody's expecting it's going to go away in the very short-term,” he said.

Kelly said that after the trade talks broke down that he felt “sick about the impact,” but also felt the importance of pushing back.

“Advocacy organizations like mine are made for moments like this where there is the need for collective action on the part of a broad-based membership like small business owners,” he said.

“While I certainly wish that we had landed a deal, it's clear our members generally do support the decision to walk away from the trade negotiations at that moment. There's support, of course, to get back to the table in short order. These are important moments where association leaders need to stand up and be counted.”

Greg Moffatt, CEO of the Chemistry Industry Association of Canada (CIAC), told The Hill Times that he doesn’t think anyone expected that talking about trade and tariffs would go on for 18 months.

“It’s definitely ebbed and flowed over that time, and certainly right now, for some, it feels a little bit like a tsunami,” said Moffatt.

“We have continued in the last 18 months to remind all three governments—Canada, the U.S. and Mexico—what's at stake, and really do hope that they can reach an agreement that reaffirms CUSMA for the mutual benefit of all three countries.”

On Aug. 24, the CIAC issued a press release stating that the new U.S. tariffs on Canadian goods will create significant challenges for domestic manufacturers, including firms in the chemistry and plastics sector, and that companies will require “timely and meaningful financial support” from the federal government to help maintain operations, protect jobs, and preserve investment in Canada as a longer-term resolution is pursued.

Moffatt told The Hill Times his industry has been “relatively pleased” with the federal government's speedy response in the form of retaliatory tariffs, which he described as measured and targeted. However, he also raised a concern about “gaps” in product categories not covered in Canada’s list of goods receiving retaliatory tariffs, which he said includes some products such as plastic film and lids or boxes made of plastic.

When asked how much of the CIAC’s advocacy time is being consumed by the trade war, Moffat said that “industry associations advocate on behalf of industry.”

“It’s kind of a crude way of putting it, but this is when we shine and when we show value for our members, right? “ he said.

“Has this taken away from other priorities? I think that's a valid question … but I think it's also a valid question to ask of government because the way I think about this one is we need to be laser-focused on Canada's competitiveness, and the need to be that focus has never been greater.”

Tariff-related advocacy around 90 per cent for CME, says Darby

Derek Nighbor, president and CEO of the Forest Products Association of Canada, told The Hill Times that issues around trade disputes with the U.S. are not new for this country's forest sector, but that “this is a very different moment given the magnitude and the breadth of the dispute.”

“It's frustrating, for sure,” said Nighbor. “We're needed now more than ever, so we'll never tire of being that voice and stepping up. It's our moment to do that, but it is frustrating, for sure.”

Nighbor described the forestry sector as among the hardest hit sectors and “significant collateral damage” in the trade war.

“We’ve got a lot on our plate here as a country. The government does, industry does, our labour unions do, as well, but we really need to find that space to carve out these regulatory solutions and improvements because if we don't, we're just creating another layer of uncertainty for our businesses, which is going to further constrain competitiveness and our ability to keep people working.”

To help support Canadian industries feeling the strain of U.S. tariffs, on Aug. 25, Ottawa announced a $7.5-billion funding package to bolster programs, including a $1.5-billion funding boost to the Regional Tariff Response Initiative, $2-billion to the Canada Strong Diversification Fund, and $3.5-billion to provide “rapid” responses to impacted workers and employers by, in part, extending employment insurance benefits.

Nighbor described the relief measures as “significant” and “welcome,” but added that “execution is going to matter,” as previously reported in The Hill Times.

Dennis Darby, president and CEO of the Canadian Manufacturers & Exporters (CME), told The Hill Times that the current trade dispute has gone on longer than he had hoped, but not longer than expected.

“We knew that when the July 1 deadline passed, the U.S. said they weren't ready yet to renegotiate CUSMA. They said they wanted to, but they weren't ready. So, we knew that we would be in for a protracted period of time, and nobody knows how long,” he said.

“When Mr. Trump got re-elected, it was pretty clear that we were going to be back in this for quite a while.”

Darby estimated that advocacy related to tariffs occupies about 90 per cent of his organization’s advocacy. Other priorities for the CME, which include finding more ways to get companies to take advantage of the federal government’s defence industrial strategy, or for manufacturers to take advantage of the government’s Major Projects Office, has continued, but at a lower level, according to Darby.

“Those are things we would love to be working on—helping having manufacturers be part of anything we do to build our infrastructure. That's a key part of the manufacturing sector. Those are all things that, absent the tariff situation, we'd be working with government on,” he said.

David Pierce, vice-president of government relations for the Canadian Chamber of Commerce, told The Hill Times that the announcement of trade talks breaking down and the imposition of new U.S. tariffs was “pretty frustrating.”

“Imagine being a business that's facing the tariffs, or that you're a trade-exposed industry where you were exporting to the U.S. and maybe you're not now, or there's a question mark about whether you will be able to continue,” he said. “We've really become more determined than ever … and I think we're certainly hopeful this will end sooner than later, but we're in it until it's over.”

When asked if there is a sense of fatigue related to trade war advocacy, Pierce said he hasn’t heard of any.

“We want to be there and responsive for industry to make sure that industry understands what government's doing and that government understands what industry needs at this time, and that's why the chamber exists,” he said.

“It's times like this when we hope to provide value for our members, but also to support the government.”

jcnockaert@hilltimes.com

The Hill Times