On Monday, Canadian Prime Minister Justin Trudeau resigned. In a carefully worded statement, he said that he will resign after the Liberal Party elects a new leader. So, in all actuality, his resignation doesn’t take effect for some time.
In the same news conference, Mr. Trudeau requested that Parliament be suspended. This action is called “proroguing Parliament” which means ending a Parliamentary session, halting all legislative business until a new session begins. During this time, all pending bills that haven’t received Royal Assent are terminated, and members are released from their duties until Parliament is summoned again. The King’s representative concurred with this request which effectively halted all Canadian Government action until March 24th.
So, what happens next?
Mr. Trudeau is still Prime Minister and can do what he wants to do without much limitation, certainly no interference by Parliament.
How does that affect Wisconsin’s businesses?
For Wisconsin importers who fear a Trump fight, they should gear up for the impact of his rhetorical 25% tariff. I feel any tariff will have its greatest effect on the U.S. automotive industry, and there are many Wisconsin companies who are in that supply chain.
For Wisconsin’s exporters, life will be the same as it was on January 5th as Canada, without leadership and no plan for a Trump tariff fight, would feel little if any impact; however, there always looms the threat of unknown market factors.
Canada is the U.S.’s second largest partner (after Mexico) and Wisconsin’s number one, representing about 30% of Wisconsin’s total exports by value.
What to do now?
Secure your supply chain. If you import Canadian components, make sure you have an adequate safety stock. Canadian hawks will tell you the sky is falling, and the economy is headed for a depression. Personally, I disagree, Will the next two and a half months be rocky for Canada? You betchya aye.
The Go Global Initiative at the Small Business Development Center (SBDC) along with Wisconsin’s international trade partners are at the ready to help you through.