With the July 1st “deadline” for the “renewal” of the Canada-United States-Mexico Agreement (CUSMA) fast approaching, member companies have been asking what should be expected. The simple answer is very little except for continued negotiations.
The CUSMA agreement, at the insistence of Donald Trump in his first term when it was approved, provides for a renewal notice after six years which is due July 1st of this year. If the three signatories do not formally renew by this time, CUSMA remains in effect but is subject to a further review each year for up to ten years. Any of the parties can terminate their participation by providing six months’ notice.
Although it is expected that Canada and Mexico are prepared to provide their notices of renewal by July 1st, it is anticipated that the Trump administration will not do so but will rather use their lack of renewal – or even a threat to withdraw – as a pressure tactic in continued negotiations. Consequently, Canada and Mexico may also withhold their renewal notices.
It is also anticipated that the Trump administration’s end game is not to “renegotiate” CUSMA directly – which would require the approval of the U.S. Congress for any significant changes – but to put in place a series of “side letters” which might (or might not) get around Congressional approval. In other words, post July 1st, the uncertainty and sometime chaotic policy decisions of the Trump administration will continue to the detriment of business including for our industry.
And What Does Trump’s Former Vice-President Mike Pence Have to Say…
A report by the Advancing American Freedom (AAF) Foundation – a conservative think tank founded by former Vice President Mike Pence – criticizes Trump’s trade policies, arguing that his sweeping tariffs backfired, slowed job creation, and hurt American manufacturers and farmers.
Core Findings of the AAF Report on the Effects on the American economy include:
• Americans Pay Trump’s Tariffs: Estimates put over 90% of the tariffs being paid by US manufacturers and consumers.
• Job Losses: Up to 1 million fewer jobs nationwide than expected under pre-tariff trends.
• Manufacturing Decline: Contrary to the goal of reviving domestic manufacturing, the sector lost roughly 75,000 positions during the first year of Trump’s policy as most imports are consumed by American businesses, transforming the tariffs into a heavy tax on high-end domestic production and making U.S. exports less competitive in world markets.
This analysis is consistent with the findings recently shared with the Canadian Manufacturing Coalition which showed that Trump’s tariff war has created a “lose-lose” situation for manufacturing in Canada and the United States with significant declines in both countries in manufacturing employment and spending on manufacturing construction.
A media report on the AAF report can be found HERE.
It is important for our industry members in the United States to join with and support our colleagues at PCPC in advocating with the U.S. administration and Congress for the renewal of CUSMA/USMCA and the end of counterproductive trade policies.
