U.S. President Donald Trump sounded a tough protectionist message in his first address to Congress Tuesday night, promising a $1-trillion (U.S.) infrastructure program that would prohibit Canadian companies from supplying goods and services for it.
"This program will be guided by two principles: Buy American and hire American," he said.
The Republican President echoed themes from his 2016 presidential campaign, insisting that American companies face a hostile world of discriminatory trade barriers in export markets that he will counteract. He vowed to slash corporate taxes and revamp trade policies to bring manufacturing investment and jobs back to the United States.
"We must create a level playing field for American companies and workers," he said.
"Currently, when we ship products out of America, many other countries make us pay very high tariffs and taxes – but when foreign companies ship their products into America, we charge them almost nothing."
Mr. Trump offered few details on his economic plan. He steered clear of commenting on a proposal by Republican leaders in the House of Representatives to impose a border-adjustment tax that would penalize imports into the United States as part of an overall corporate tax reform package.
However, the President made it clear that foreign companies will find it harder to do business in the vast American market.
The U.S. Congress insisted on "Buy American" provisions in stimulus spending that was approved after the 2008-09 recession. The move forced contractors to ensure their suppliers were strictly U.S.-based, shutting out Canadians companies from state and local projects that were funded with federal stimulus money.
Mr. Trump reiterated a pledge to require companies building pipelines in the United States to use American steel pipe. In the past, at least one Canadian company has supplied pipe for cross-border projects. On the same day in January that Mr. Trump signed another memorandum reviving the Keystone XL pipeline extension, he said another memorandum instructed his Commerce Secretary to devise a plan to ensure pipeline companies use U.S. steel. That move that would run counter to NAFTA provisions that require non-discriminatory treatment of other treaty partners' companies.
It's not clear whether that requirement will impede TransCanada Corp.'s application for a permit to construct the cross-border Keystone project that would deliver oil sands bitumen to refineries on the U.S. Gulf Coast.
Prime Minister Justin Trudeau has been working aggressively to ensure Canada is not damaged by the U.S. protectionism, arguing that the two countries' economies are so closely entwined that any pain felt by Canadian companies would be shared by their American suppliers and customers.