Just hours after the United States announced a military operation in oil-rich Venezuela, seizing President Nicolás Maduro, Katie Miller, the wife of a top adviser to President Donald Trump, issued a warning to Canada on social media. Miller stated that the U.S. no longer requires anything from Canada and declared an end to free trade.
This sentiment aligns with views from Trump’s inner circle, signaling a shift in trade dynamics as the U.S. gains potential access to Venezuela’s substantial heavy crude oil reserves. As Canada prepares to assess the Canada-U.S.-Mexico Agreement (CUSMA), experts and former officials are contemplating the impact of developments in Venezuela on Canadian negotiation strategies.
RJ Johnston, the director of energy and natural resources policy at the University of Calgary, highlighted the challenges in Venezuela’s oil industry, emphasizing the risks for U.S. oil companies aiming to re-engage in the country. Despite U.S. government efforts to encourage oil executives to invest in Venezuela, Canadian Prime Minister Mark Carney remains unfazed, citing the competitive advantage of Canadian oil in terms of cost, cleanliness, and risk.
While Canadian energy stocks and heavy oil prices took a hit following the U.S. intervention in Venezuela, Kate Kalutkiewicz, a former senior director for international trade, emphasized Trump’s strategy to diversify trade partnerships to reduce reliance on any single trading partner. Fen Osler Hampson, co-chair of the Expert Group on Canada-U.S. Relations, echoed this sentiment, highlighting potential pressure on Canada in critical sectors due to U.S. strategic interests in the Western Hemisphere.
Regarding trade negotiations, demands from the U.S. to enhance market access for dairy products, address provincial boycotts of U.S. alcohol, and amend the Online Streaming Act are on the table. Laura Dawson, executive director of the Future Borders Coalition, stressed the significance of trade concessions and the need for careful deliberation to safeguard economic interests.
Despite challenges, experts believe that while a new North American trade agreement may not emerge, the foundation of CUSMA and the North American economic relationship remain robust. The ongoing negotiations reflect Trump’s focus on maintaining the North American supply chain’s importance for U.S. economic competitiveness.