Trade wars? Tariffs? How Canada’s economic world would fare under a president Kamala Harris

Details of Kamala Harris’ economic agenda will emerge as the U.S. presidential campaign nears Election Day on Nov. 5.
It’s not too early, though, to assess the Democratic presidential nominee’s proposed economic stewardship from the basic principles the U.S. vice president has already put forward.
Several of those have been adopted by Canada and might have been inspired by Canadian experience. Others could be worth emulating.
A drastic change in Canada’s trade relations with the U.S., our biggest trading partner, is what most worries Canadian policymakers and the business community about the U.S. election.
So, it’s important to start by saying that Harris will not launch trade wars.
Harris is expected to retain existing U.S. tariffs, notably on Chinese goods, of the kind that Canada just announced on imported Chinese electric vehicles, steel, and aluminum. 
By sharp contrast, Donald Trump, the Republican presidential nominee, would impose a 10 per cent tariff on U.S. imports from all countries, including Canada and other U.S. allies.
That would inflict more damage on Canada than the selective tariffs Trump imposed on Canadian steel and aluminum in his first presidency.
Trump’s planned tariff regime includes a 60 per cent surtax on the imported Chinese goods sold at Walmart, Costco, and Target.
In her first economic speech, at a North Carolina rally on Aug. 16, Harris said that Trump “wants to impose what is in effect a national sales tax on everyday products and basic necessities that we import from other countries. That will devastate Americans.”
The Democrats claim that Trump’s tariffs would cost the average American household almost $5,400 a year in higher prices for clothing, over-the-counter medications and other imported goods.
Some non-partisan analysts put that number closer to $2,300.
The Harris campaign uses the higher amount because Trump has lately mused about toughening his planned protectionism, imposing a 20 per surtax on all non-Chinese imported goods.
Elsewhere in Harris’ economic plan are measures familiar to Canadians.
Harris wants an expanded child tax credit of as much as $4,800 per child and an $8,000 credit for newborns.
During a U.S. experiment with expanded child tax credits during the pandemic, which has since lapsed, the U.S. child-poverty rate fell to a record low of 5.2 per cent.
That policy has worked in Canada, as well, where the Canada Child Benefit has helped lift an estimated 430,000 children from poverty since it was introduced in 2016.
And as the Trudeau government has done, Harris would provide down payment support for first-time homebuyers, amounting to as much as $33,000 per homebuyer.
That measure is criticized as inflationary, as it was by the Bank of Canada and other critics of the policy in Canada.
Yet the Canadian inflation rate has continued to fall — 2.5 per cent in July — since the policy was adopted.
Harris proposes an arguably more ambitious approach to pharmacare than the regime adopted by Canada this year, which covers only diabetes medications and contraception.
The Democrats would cap out-of-pocket expenses for all medications at $2,700 per year.
The Harris campaign has also taken a more rigorous approach to high food prices than Canada, proposing federal legislation that would outlaw price-gouging.
Critics rightly say that such a law would be difficult to enforce.
But prominent U.S. economists including Mark Zandi have said the greater scrutiny of grocery pricing practices would benefit consumers.
To pay for her proposed social benefits, Harris would increase the U.S. corporate tax rate to 28 per cent from 21 per cent.
That’s still lower than the 35 per cent rate as recently as 2017, when Trump became president and cut the rate.
Ottawa’s initiatives in the past year to raise taxes on wealthy Canadians are mirrored in a Harris proposal to impose on the richest 0.01 per cent of U.S. households a minimum tax of 25 per cent on their income.
Harris would also tax the unrealized capital gains of Americans with a net worth exceeding $135 million.
That is a radical proposition compared with Canada’s controversial expansion this year of the inclusion rate for capital gains tax treatment.
Tax policy in Canada and the U.S. has always been to wait until an asset is sold before taxing gains from the sale. But Harris means to tap that potential source of government revenue just the same.
As it happens, the proposed tax regimes of Harris and Trump would see the U.S. government collect roughly the same projected $85 trillion in tax revenues over the next decade.
The difference is who pays.
In promising tax cuts for about 100 million Americans while raising taxes on the wealthiest corporations and individuals, Harris is engaging in a modest form of wealth redistribution.
As president Trump was thwarted by Congress and the courts on many of his proposals, there’s no assurance of Congressional approval for a Harris administration’s initiatives.
But they do change the conversation to one that argues that we can do better than winner-take-all societies.