Managing Canada-US Trade for Executives

US-Canada trade shares one of the largest trade relationships in the world. The US imports more goods from Canada than China. Only Mexico exports more to the United States. 

For Canada, this represents a significant revenue base. Overall, 78% of Canadian goods are exported, accounting for $774 billion of commerce — about half of which includes exports to the US — and millions of jobs.

For most industries, executive leadership must understand how to navigate changes and challenges to international trade.

 

The Evolution of North American Trade Agreements

 

The North American Free Trade Agreement (NAFTA) in 1994 marked a significant change. It eliminated most tariffs and trade barriers across North America and expanded trade opportunities. However, it also enabled the movement of jobs to Mexico, which has a lower wage base than either Canada or the US.

The United States-Mexico-Canada Agreement (USMCA/CUSMA) further refined the relationship. Enacted in 2020, it modernized digital trade provisions that protect Canadian tech and digital businesses, enhancing intellectual property protections across North American trade.

It also increased compliance costs for businesses and introduced new expenses to comply with origin manufacturing rules.

 

The Rise of Near-Shoring Trends

 

These agreements helped increase manufacturing in North America due to its relaxation of tariffs, however, the trend to nearshoring significantly increased during the COVID pandemic. As companies struggled with supply chain disruptions, especially from China, they turned toward acquiring or engaging manufacturers closer to home base.

Some Canadian companies acquired US manufacturing operations to optimize supply chains and maintain production volume. However, analysts say near-shoring trends benefitted the US and Mexico more than Canada.

 

What Executives Need to Navigate

 

Navigating the complexity of trade and supply decisions is a critical skill for executives, requiring a deep understanding of the marketplace and the potential shifts. It becomes especially complex for businesses that operate in multiple countries or that cross borders. 

Understanding and quickly responding to shifting governmental policies and trade regulations will be crucial. For example, US President-elect Trump has threatened to place 25% tariffs on Canadian goods exported to the US, which would have a significant impact on exports and require additional decisions about trade relationships.

Executives will have to make critical decisions that may have long-lasting impacts on operations and the bottom line — often amid a great degree of uncertainty. Policy changes would affect decisions about nearshoring, supply chain structures, and profit margins.

 

Finding the Right Executive Leadership for Your Business

 

In this complex landscape, you must find leaders who can manage compliance and find opportunities to grow your business. Leaders must be able to:

  • Identify and capitalize on cross-border trade opportunities
  • Comprehend the nuanced implications of US-Canada trade policies
  • Understand diverse international markets
  • Make decisive, potentially transformative decisions

 

Trust will be key. These are high-stakes decisions, so you must be confident in those you choose to lead your organization. Not every executive is capable of making these decisions. 

Specialized Skill Set

You need executive leadership with specific skills to manage these complex US-Canada trade environments, including:

  • Strategic Thinking: Understanding the big picture, anticipating outcomes, and developing both short-term and long-term plans that align with organizational goals.
  • Emotional Intelligence: Managing personal emotions, understanding others' perspectives, and navigating interpersonal dynamics with self-awareness and empathy. 
  • Critical and Analytical Reasoning: Processing complex information quickly, evaluating scenarios, and using data-driven insights for informed decision-making.
  • Decisive Leadership: Making confident, timely decisions, taking calculated risks, and standing firmly behind decisions.
  • Communication and Persuasion: Clearly articulating and explaining decisions, inspiring teams, and building consensus among stakeholders. This is critical to effecting change management strategies within organizations.
  • Ethical Judgment: Maintaining integrity and balancing business objectives with moral responsibilities.
  • Adaptability and Resilience: Remaining flexible, learning from experiences, and maintaining composure during challenging situations.
  • Financial and Business Acumen: Understanding of financial principles, market dynamics, economic trends, and the potential business impact of strategic decisions.
  • Technological Literacy: Comfortable with emerging technologies and integrating technological strategies into operations.
  • Collaborative Problem-Solving: Creating inclusive decision-making environments, drawing insights from diverse teams, and balancing individual expertise with this collective intelligence. 

It’s a long list. However, managing trade relationships is complex and the decisions that must be made can impact your organizations for the future.


How PIXCELL Can Help

 

PIXCELL is a leading executive search firm with international capabilities. Acting as your partner in executive leadership, PIXCELL specializes in identifying exceptional leaders for today’s complex business environments — tailored executive searchers to your company’s unique needs.

With deep expertise in Canadian markets and a sophisticated understanding of international trade challenges, we excel at finding executives who meet your needs and help you solve your most critical leadership challenges.

Contact PIXCELL today to discuss your executive search needs.

 

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