Canada's trade resilience faces significant uncertainty as the 2026 joint review of the Canada-U.S.-Mexico Agreement (CUSMA) approaches, potentially threatening the country's privileged access to its largest trading partner.
Current Trade Stability Under Threat
Despite U.S. President Donald Trump's broader trade wars, Canada has maintained strong trade relations under CUSMA, with Prime Minister Mark Carney frequently highlighting that over 85 percent of Canadian exports to the United States remain tariff-free. However, this stability could face challenges when the mandatory review process begins next year.
All three member countries have already launched consultation processes to gather stakeholder feedback about the trade agreement's strengths and weaknesses. The United States Trade Representative (USTR) will conduct crucial hearings in Washington, D.C. from December 3 to 5, 2025, where more than 170 witnesses are scheduled to provide testimony.
Protectionist Concerns Emerge
Laura Dawson, executive director of the Future Borders Coalition, has expressed concern about the direction of the review process. Her organization, dedicated to improving cross-border travel and trade between Canada and the U.S., has noted that fewer than 10 submissions among those already filed focus specifically on Canada-U.S. trade relations.
"Narrowly protectionist viewpoints appear to dominate the docket," observed Dawson, who brings significant expertise from her previous roles as senior economic specialist at the U.S. Embassy in Canada and senior advisor on economic affairs for the U.S. Department of State.
Practical Improvements Over Radical Changes
The Future Borders Coalition advocates for a "do no harm" approach to the renegotiation, recognizing CUSMA as the crucial legal foundation for North American commerce. Rather than seeking sweeping changes, the coalition focuses on practical improvements that could benefit businesses across all three nations.
Key priorities include reducing compliance costs, streamlining regulatory burdens, and improving supply chain efficiency—particularly important for the coalition's membership from transportation and logistics sectors. Dawson emphasizes that while some anticipate dramatic outcomes, the more likely scenario involves gradual deterioration rather than sudden collapse of trade relations.
The upcoming USTR hearings will play a pivotal role in shaping the American position ahead of formal renegotiation talks, with the proceedings informing a report to Congress that could determine President Trump's approach to the vital trade partnership.
