A recent report warns of significant job losses and economic repercussions if the Canada-U.S.-Mexico Agreement (CUSMA) collapses amid ongoing trade talks. The analysis by Oxford Economics for the Canadian American Business Council explores three potential outcomes: maintaining current tariffs, CUSMA dissolution, or successful renegotiation.
In the event of CUSMA termination, an estimated 214,000 American and 102,000 Canadian jobs would be at risk compared to the status quo. Conversely, successful renegotiation could create 137,000 new jobs in the U.S. and 98,000 in Canada, enhancing economic prospects.
The CEO of the Canadian American Business Council emphasized the crucial role of the U.S.-Canada trade relationship, stressing that job security and stability are paramount. The report outlines significant GDP impacts, predicting a $1.04 trillion loss for the U.S. and a $271 billion decrease for Canada by 2035 if CUSMA fails.
Manufacturing sectors, particularly in auto, wood, and metal production, face severe repercussions in the worst-case scenario, affecting regions like Iowa, Michigan, Kentucky, and Alabama in the U.S., as well as Quebec and Ontario in Canada.
As the deadline for potential new tariffs approaches, trade officials are striving to reach a deal to avert further economic strain. Trade Minister Dominic LeBlanc’s ongoing discussions with U.S. counterparts aim to present a viable trade proposal to President Donald Trump before the looming tariff deadline.
Negotiations involve concessions from both sides to secure a favorable agreement. Failure to reach a deal would disproportionately impact central Canadian manufacturers, with cement, concrete, paper products, and other sectors facing the brunt of tariff increases according to Oxford Economics’ latest analysis.