The Bank of Canada warns of a collapse in trade with Washington and a fracturing of the global order
In remarks reflecting the deepening rift between traditional North American allies, Tiff MacKelley, governor of the Bank of Canada, declared that the era of clear and consistent trade relations with the United States is "over." These statements echoed warnings of a fracturing global order, now directly threatened by recent economic and geopolitical policies pursued by Washington.
The end of the era of open trade
McCallum stated unequivocally that "it is abundantly clear that the era of open, rules-based trade with the United States is over." His remarks came just days after a similar warning from Mark Carney, former governor of the Bank of Canada and the Bank of England, to US President Donald Trump, indicating that the latter's approach had created a serious "fracture" in the global economic order that had prevailed for decades.
During his participation last week in the World Economic Forum in Davos, Carney called on the world's middle powers to unite and coordinate their efforts in the face of what he described as "hegemonic" forces, in an implicit reference to the unilateral policies imposed by the superpowers.
Heated exchange between Trump and Carney
Carney's invitation did not go unnoticed, as it provoked a sharp rebuke from US President Donald Trump, who responded from the same Davos podium, saying: "Canada is only alive because of the United States. Remember that, Mark, the next time you make your remarks." Trump did not stop there, but reiterated his threat to impose punitive tariffs of up to 100% on Canadian imports to the United States if Ottawa proceeds with a new trade agreement with China, which Washington considers a threat to its economic interests.
The historical context of trade relations
To understand the seriousness of these statements, one must consider the historical context of the relationship between the two countries. Canada and the United States share the world's largest bilateral trade relationship, with a daily trade volume exceeding two billion dollars. This relationship has long been based on free trade agreements (such as NAFTA and the current USMCA) that ensure the smooth flow of goods and services. However, the shift towards protectionist policies and the "America First" slogan has begun to undermine the foundations of this strategic partnership, leaving the Canadian economy, which is heavily reliant on exports to its southern neighbor, vulnerable.
Repercussions of the breakdown of the global order
The significance of this event extends beyond the bilateral dispute to encompass the entire global economic system. Warnings from Canadian officials point to a structural shift in the international economy, where the system of globalization and the rules of the World Trade Organization are being replaced by a new system based on regional blocs and sheer political power. This fracturing presents "middle powers" like Canada and the European Union with existential challenges, forcing them to seek new alliances and diversify their trading partners to reduce their dependence on Washington—a development that could redraw the map of international alliances in the coming years.
