Washington: So, it looks like Trump is gearing up to shake things up with Canada and Mexico again. His promise to slap a 25% tariff on goods has got everyone on edge. Experts think he won’t wait until 2026 to dive into the CUSMA trade agreement review.
Greta Peisch, who used to be the general counsel for the U.S. Trade Representative, believes Trump is eager to tackle trade issues right away. She thinks he’s not the type to sit back and wait for a year to get started.
Remember when he ditched NAFTA? That really showed how much power the U.S. has over Canada. With over 77% of Canadian exports heading to the U.S., it’s a big deal. The CUSMA deal, which is like the new NAFTA, was a tough negotiation for Canada after Trump’s first win.
Back in 2018, Trump even hinted at a hefty tariff on Canadian cars, but that never happened. Still, he did impose tariffs on steel and aluminum, which sent a clear message that things were changing.
Meredith Lilly, a trade expert from Carleton University, thinks the CUSMA deal was a win for Trump. She hopes he won’t want to mess with something that’s part of his legacy. But Carlo Dade from the Canada West Foundation isn’t so sure. He warns that Trump’s campaign promises might not include Canada’s best interests.
Dade points out that negotiations are about more than just talking; it’s about setting the stage for those talks. Trump has already started to sway public opinion against trading partners, which could complicate things.
There are three possible outcomes for the CUSMA review. The countries could suggest changes and renew the deal, the U.S. could pull out, or they could delay the renewal for a year, which would put Canada in a tough spot.
Canada isn’t fully ready for what’s coming, according to Dade. While Canadian negotiators have been reaching out to Republicans, he thinks they missed some opportunities to gather insights from businesses before the election.
On the flip side, Lilly believes Canada has been preparing well. They’ve been holding public consultations and connecting with various interests. But with Trudeau stepping back soon, there’s uncertainty about who will represent Canada in these discussions.
Trump’s tariff threats are also a major hurdle for Canada and Mexico as they try to have honest talks about the trade deal. Lilly thinks this could really complicate things moving forward.
This report was first published on January 18, 2025, by The Canadian Press.
