A recent report has highlighted the potential repercussions of the ongoing trade discussions between the U.S. and Canada, emphasizing the significant job losses and economic consequences that could result if the Canada-U.S.-Mexico Agreement (CUSMA) were to collapse. The report, commissioned by the Canadian American Business Council and conducted by Oxford Economics, examined three possible outcomes of the negotiations.
According to the report, if CUSMA were to disintegrate, an estimated 214,000 American and 102,000 Canadian jobs would be at risk compared to the current status quo. Conversely, successful renegotiation of CUSMA could lead to job gains of 137,000 in the U.S. and 98,000 in Canada.
Beth Burke, the CEO of the Canadian American Business Council, emphasized the importance of the trade relationship between the two countries, stating that it plays a crucial role in the prosperity of both nations. The report also projected significant negative impacts on the GDP of both countries in the event of a breakdown, with the U.S. economy facing a potential loss of $1.04 trillion US and Canada $271 billion Cdn by 2035.
Manufacturing sectors would bear the brunt of the fallout in both countries, with the worst-case scenario impacting industries such as auto, wood product, and metal manufacturing. Regions like Iowa, Michigan, Kentucky, Alabama, Quebec, and Ontario would be particularly affected if CUSMA were to collapse.
Efforts are underway to reach a trade deal before the looming deadline for new tariffs on Canadian goods. Trade Minister Dominic LeBlanc and U.S. Trade Representative Jamieson Greer are engaged in negotiations, aiming to present a potential agreement to President Donald Trump. The outcome of these talks could determine the fate of upcoming tariffs and the future of trade relations between the two countries.
Despite the challenges, stakeholders remain hopeful for a resolution that benefits both nations. Concessions may be necessary from both sides to reach a mutually agreeable deal. The impact of these negotiations extends beyond just jobs and GDP, with various sectors bracing for potential disruptions in the event of tariff escalation.
