If the Canada-U.S.-Mexico free trade deal, also known as CUSMA, breaks down, it would lead to more than 100,000 job losses in Canada and more than twice that in the United States, a new report by an industry group is warning.
In July, Washington said it won’t renew the deal, known as USMCA in the U.S., in its current form. That means the trade deal must be reviewed annually, adding to the volatility and economic uncertainty facing businesses. At the same time, the clock is ticking ahead of a fresh round of U.S. tariffs.
U.S. President Donald Trump has vowed to hit Canada with new sweeping 50 per cent tariffs on a wide range of goods, which are set to land on Aug. 19.
A lot is riding on the deal being renewed, a new report by the Canadian American Business Council warns.
“Successful renegotiation of USMCA would create an additional 137,000 American jobs and 98,000 Canadian jobs in 2027 relative to the status quo,” the report reads.
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It adds, however, that a breakdown of the deal would be disastrous for jobs on both sides of the border.
“By contrast, the breakdown of USMCA would be accompanied by 214,000 and 102,000 fewer jobs, respectively,” it adds.
Businesses on both sides of the border are looking for predictability, said Beth Burke, CEO of the Canadian American Business Council.
“The choices made today will determine North America’s economic competitiveness for decades to come,” Burke said in a statement.
Canada-U.S. Trade Minister Dominic LeBlanc is in Washington this week, joining Canada’s chief negotiator Janice Charette in looking to hammer out a trade deal with the U.S.
Trump’s decision to impose 50 per cent tariffs on Canadian goods was in response to what the U.S. calls “discriminatory” measures.
Trump signed three executive orders, each one using a different justification for the new tariff: the provincial and territorial boycotts on American alcohol products, Canada’s retaliatory tariffs on U.S.-made vehicles and auto parts, and quotas on American dairy imports under Canada’s supply management system.
In early 2025, several Canadian provinces removed U.S. alcohol from their shelves in response to Trump’s trade war and threats to make Canada the “51st state.”
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