It’s ‘business as usual’ after CUSMA deadline passes with U.S. irritants driving trade talks, say Canada West CEO, ex-diplomat

In the wake of the United State's refusal to renew the trilateral trade pact, Canada will have to get used to a degree of uncertainty for the foreseeable future, say a Canadian business leader and a former Canadian diplomat to the U.S.

Canada Day marked the deadline to renew the Canada-United States-Mexico Agreement (CUSMA) for a 16-year period, but the United States confirmed what had long been anticipated: that the country would not be extending the trade deal. 

CUSMA still doesn’t expire for another decade, so the current agreement will remain in effect until then, entering a 10-year long annual review process, unless one of the three counties issues an official six-month notice to withdraw from the agreement. 

But president and CEO of Canada West Foundation Gary Mar said even though CUSMA remains in effect, the passage of July 1 is still “important,” as it will foment uncertainty in the business sector. 

“It’s just business as usual, but that doesn't mean that the passage of July 1 is a nothing burger,” he said in an interview with The Hill Times. 

“It will continue to create uncertainty here in Canada, and you'll have companies that will not be prepared to invest or expand—or perhaps they may even decide to move to the United States— not knowing what's going to happen with CUSMA or the sectoral tariffs,” said Mar, a former Alberta MLA and Progressive Conservative cabinet minister.  

Former Canadian diplomat Roy Norton, a past consul general in Detroit and Chicago, said "there was something approaching a zero per cent chance of anything happening" on July 1.

“It’s likely, in my view, that nothing will happen, as in this simply launches us into a period whereby we will have negotiations over … irritants, principally irritants identified by the Americans,” he said.  

Though U.S. President Donald Trump has repeatedly slammed the agreement he penned in his first term, he has yet to indicate he is planning to back out of the agreement entirely.

On July 1, U.S. Trade Representative Jamieson Greer said in a statement that America would “continue to engage” with Mexico and Canada over CUSMA’s “shortcomings” and America's trade deficits with them. 

"The agreement remains in force pending resolution of these issues or until the agreement’s termination," Greer’s statement read.

Price to end uncertainty 'too high' for Canada: Norton

Norton said he doesn’t think the U.S. is “as bothered as they should be” about the uncertainty of leaving CUSMA unrenewed, as that uncertainty is less problematic for America than it is for Mexico and Canada. 

“But the price of trying to … end uncertainty for us is almost certainly going to be too high,” Norton said, adding that the United States would also likely generate new demands, even if Canada met current ones.

The Trump administration has signalled that its trade deal priorities include increasing the amount of American-made car components used in North American builds and gaining more access to Canada's dairy market. 

“I suspect our side has internalized that the objective here is to manage the issue,” Norton said. “To continue discussions, maybe for a good long time, on the individual irritants.”

On July 1, Minister of Canada-U.S. Trade Dominic LeBlanc (Beauséjour, N.B.), who also holds the internal trade file, issued a statement, pledging ongoing negotiation following the renewal deadline, but making no mention of the U.S.’s position.  

In a virtual meeting with Greer and Mexico Secretary of Economy Marcelo Ebrard, LeBlanc said he “reaffirmed Canada’s unwavering support” for the deal and its renewal. 

“We agreed on the importance of continuing our discussions and identifying ways to ensure trade and investment frameworks between Canada, the United States and Mexico continue to support North American prosperity and competitiveness,” LeBlanc wrote. 

For Canada, that means addressing the tariffs that remain on steel, aluminum, the auto industry, and lumber, LeBlanc wrote. 

The majority of Canadian goods remain exempt from Trump's sweeping tariffs imposed in February of last year, as they are covered under CUSMA. But Canada’s automobile, aluminum, and lumber industries have been struggling to adapt to the tariffs that have been plaguing the sector for the past 18 months.

Canadian Vehicle Manufacturers Association president and CEO Brian Kingston told CBC that manufacturers dealt with about $5-billion in tariff costs in 2025. 

LeBlanc indicated to CBC on July 1 that the U.S. wants “to make bilateral deals with Canada and Mexico to deal with a number of issues and we’re prepared to have those conversations with them.”

But Norton said he expects discussions with the U.S. will continue on until 2029, at which point the agreement’s review will take place under a different U.S. administration that may be “more willing” to probe for a “true win-win” that goes beyond individual issues and looks at the a trade agreement more generally. 

Carney 'more intent on investing heavily in oil' than getting a deal with U.S., says Bloc leader

Prime Minister Mark Carney (Nepean, Ont.) himself had already downplayed the likelihood of CUSMA being renewed by the deadline before July 1, telling reporters on June 30 that he was not “looking for” his pen, but that he was “expecting a constructive exchange.”

One of Carney's top campaign pledges, which he rode to election in April 2025, was to secure a deal with the U.S., as Canada grappled with then-newly imposed sanctions on Canadian goods.

In a July 2 French statement, Bloc Québécois Leader Yves-François Blanchet (Beloeil—Chambly, Que.), too, called the U.S.’s refusal to renew “unfortunately predictable,” but he highlighted the impact on Quebec’s lumber and aluminium sectors. 

“Canada’s prime minister seems more intent on investing heavily in oil and pipeline construction than on honouring his election pledge to reach an agreement with the U.S.,” Blanchet wrote. 

Carney signed an energy deal with Alberta in November and agreed to an industrial pricing model with the province—one of the terms needed to be agreed to approve a new pipeline project running from Alberta to British Columbia, outlined in the initial deal. The Bloc—as well as climate groups and environmentally minded MPs in Carney’s own caucus—have denounced the move. 

Blanchet added that though Carney can count on the Bloc's "co-operation" when it comes to defending Quebec’s economy, until his negotiations bear fruit, the feds need to provide immediate support to help Quebec businesses "weather this crisis."

In a June 25 press conference, Conservative Leader Pierre Poilievre (Battle River—Crowfoot, Alta.) also called on Carney to get a deal, arguing the Liberal prime minister has made major concessions to the U.S.—like axing the digital services tax, increasing defence spending, and removing counter tariffs—but he hasn't brought them to the negotiating table.

"We need the prime minister to get a good deal, and fast," he said. "He promised he'd have one a year ago, but since that time, he's made a phenomenal amount of concessions while getting nothing in return."

But Norton said that fruitful CUSMA negotiations would have to incorporate the objectives of all three countries with trade-offs, but “that’s not where we’re at.” 

“We are instead dealing with one party, the United States, being willing to largely, one might say, totally disregard its obligations while continuing to insist that they be accommodated on an ever-changing, ever-growing list of demands,” he said. 

“That's not sustainable in any kind of trilateral trade negotiation, so we'll all just skate for the foreseeable future.”

He added that Canada will have to “hope” that the “overwhelming desire” of the American business community to not have Trump withdraw from CUSMA will constrain the president from doing so. 

Mar said it’s “unlikely” the U.S. will withdraw from CUSMA. 

“You’ve got 38 U.S. states—both red and blue states—that identify Canada as their number one trade destination,” he stressed.

He added the Canadian government should not be thinking just about Trump, but about U.S. governors. 

“Ultimately, people in Washington don't run the economy, governors do, and so we've got 13 diplomatic missions throughout the United States, and we need to have consuls general that are not just good career diplomats, but we need people that have business acumen and political acumen.” 

ewand@hilltimes.com

The Hill Times