Looming spate of U.S. tariffs could weaken Canada’s stance in CUSMA talks: economist

A forthcoming wave of United States tariffs could potentially undermine Canada's position in the ongoing CUSMA negotiations, according to a new analysis from Capital Economics. Bradley Saunders, the firm's North America economist, warns that the looming duties could "reignite a tit-for-tat trade war, hurt business confidence and slow growth."

The U.S. government plans to impose a 50 percent tariff on hundreds of categories of goods worth around US$20 billion, equivalent to approximately five percent of Canada's exports to the U.S. last year. The tariffs are a response to Canada's provincial bans on American alcohol, a supply-managed dairy system, and vehicle quotas. Saunders suggests that if a last-minute deal were reached, Canada might have to concede significant leverage, increasing the likelihood of an unfavorable outcome in future CUSMA discussions.