A recent report has outlined the potential consequences of the Canada-U.S.-Mexico Agreement (CUSMA) breakdown, warning of significant job losses and economic impacts on both sides of the border. The analysis, conducted by Oxford Economics for the Canadian American Business Council, considered three possible outcomes of the ongoing trade negotiations between the U.S. and Canada.
If CUSMA were to collapse, the report estimates that approximately 214,000 American and 102,000 Canadian jobs would be at risk compared to the current tariff situation. Conversely, successful renegotiation of CUSMA could result in job gains of 137,000 in the U.S. and 98,000 in Canada.
The CEO of the Canadian American Business Council, Beth Burke, emphasized the importance of the trade relationship between the two countries, noting the significant impact on jobs and economic stability. The report projects that the breakdown of CUSMA would lead to substantial GDP losses, with the U.S. economy facing a potential $1.04 trillion impact and Canada $271 billion by 2035.
In a worst-case scenario, the report highlights that manufacturing industries in the U.S., particularly in auto, wood product, and metal manufacturing sectors, would suffer the most. Similarly, Quebec and Ontario in Canada would bear the brunt of job losses if CUSMA were to fail, affecting their manufacturing sectors significantly.
As the deadline for new tariffs on Canadian products approaches, trade representatives are working to reach a trade deal to avert the tariffs. Trade Minister Dominic LeBlanc and U.S. Trade Representative Jamieson Greer are engaged in discussions to present a potential deal to President Donald Trump before the tariff deadline.
Negotiations are ongoing, with concessions expected from both sides to reach a mutually beneficial agreement. Failure to secure a deal could result in severe impacts on manufacturers in central Canada, particularly in sectors like cement, concrete, paper products, wood, computers, and electronics.
The report underscores the critical importance of successful trade negotiations between the U.S. and Canada to preserve jobs, economic growth, and stability on both sides of the border.