Looming spate of U.S. tariffs could weaken Canada’s stance in CUSMA talks: economist
An economic report says the latest bevy of threatened U.S. tariffs could spell trouble for the renegotiation of the Canada-U.S.-Mexico trade agreement.
A recent economic analysis warns that forthcoming U.S. tariffs may weaken Canada's negotiating position in the CUSMA talks. Bradley Saunders, Capital Economics' North America economist, expresses concern that the upcoming duties could "reignite a tit-for-tat trade war, hurt business confidence, and slow growth." Even if a last-minute agreement is reached, Canada may have to concede significant negotiating power in future CUSMA discussions.
The U.S. government recently announced plans to impose a 50% tariff on over 200 categories of goods worth approximately US$20 billion. These tariffs are set to take effect on Wednesday via Section 338 of the Tariff Act of 1930, a seldom-utilized legal mechanism from the Great Depression era. Saunders predicts that if the tariffs are implemented, Canada's near-term GDP could be adversely affected, although a full-blown recession appears unlikely.
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