A fresh report has cautioned that the breakdown of the Canada-U.S.-Mexico Agreement could result in significant job losses and economic impacts on both sides of the border. The analysis, commissioned by the Canadian American Business Council and conducted by Oxford Economics, explored the potential outcomes of the ongoing trade discussions between the U.S. and Canada.
Three scenarios were examined: maintaining the current tariff situation, the collapse of the CUSMA agreement, and a successful renegotiation leading to improved trade relations. If CUSMA were to dissolve, an estimated 214,000 American and 102,000 Canadian jobs would be at risk compared to the status quo. Conversely, successful renegotiation 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 significance of the U.S.-Canada trading relationship for both nations’ prosperity. The report also forecasted substantial GDP impacts, predicting a $1.04 trillion loss for the U.S. and a $271 billion decline for Canada by 2035 in a breakdown scenario.
In terms of sector impacts, the report highlighted potential challenges for manufacturing industries in the worst-case scenario, particularly in auto, wood product, and metal product manufacturing in the U.S. and Canada. Notably, Quebec and Ontario would face the most significant repercussions if CUSMA were to collapse.
As the August 19 deadline approaches for new tariffs on Canadian exports, officials are actively engaged in negotiations to avert further economic strain. Trade Minister Dominic LeBlanc and U.S. Trade Representative Jamieson Greer are working towards presenting a potential trade deal to President Donald Trump soon.
Amid ongoing discussions, concessions from both sides may be necessary to secure a favorable agreement. The looming threat of tariffs underscores the importance of swift and effective negotiations to safeguard the economic interests of both nations.
