Regardless of who wins the election this fall, the looming Canada-United States-Mexico Agreement (CUSMA) renegotiations scheduled to take place in 2026 spell bad news for Canadian business. Our economic relationship with the United States is critical, and often in flux. For the first time in history, Mexico has surpassed Canada as the US’s top trading partner.
Canadian business leaders need only reflect on the first “New NAFTA” negotiations under the Trump administration to understand the instability and economic impact this renegotiation will bring to our industries. Former President Trump has already pledged to apply a 10% tariff on all goods entering the United States if elected this November. Our steel and lumber industries remember well the damage retaliatory trade wars have done to their sectors and those connected to them down the supply chain. With United States trade policy continuing down a path of protectionism, we can only expect many of the same fights to be had this time around as well.
There will also be new issues that have surfaced between the three nations. For example, the United States will argue that the aggressive increase in Chinese investment in Mexico’s manufacturing industry, what trade experts call “near-shoring”, goes against the spirit of CUSMA, trying to strengthen the North American supply chain, and keep out potential geo-political bad actors. This debate alone could stretch the negotiations for months if not years.
Why does this matter to you?
No matter the results in November, if your business is not preparing a risk mitigation strategy already, it’s time to get started. The American policy conversation is moving quickly, and your business should be best positioned to navigate the shifting terrain with the help of McMillan Vantage’s expert approach.
If you are seeking government relations advice to navigate Canada-US policy issues, or to prepare for a potential CUSMA renegotiation, you can reach out to McMillan Vantage at info@mcmillanvantage.com.
