By Don Newman                                 

August 29, 2025

We have to face facts. While Canadian government officials are working to prepare for the review and possible renegotiation of the CUSMA — the Canada United States Mexico free trade agreement that governs and provides for free trade among the three nations — much of that preparation may well be a waste of time.

Instead of traditional trade negotiations, Canada and Mexico are preparing for the likelihood that the CUSMA that emerges from the negotiations in 2026 is going to be dictated by an American president whose exotic approach to tariffs and trade defies precedent, logic, and economic reason; Donald Trump.

Unlike the last renegotiation of the trade agreement in the first Trump administration, this time Trump is said to be taking a much more granular interest in all trade. This time, American negotiators are telling Canadian counterparts as the talks evolve “we have to check it with the boss.”

And because of that, the hopes that a revised CUSMA will provide even greater protection against both the tariffs and harassments the United States has already imposed against its trading partners are likely in vain.

At the moment, the United States is levelling punishing tariffs on Canadian steel, aluminum and copper exports, as well as on automobiles containing parts not sourced in North America. All other exports consistent with the current CUSMA agreement enter the United States duty free.

This has allowed Prime Minister Mark Carney to rightfully proclaim that, at the moment, Canada has the best access to the American market of any country in the new world order of arbitrary Trump tariffs imposed on almost all imports from anywhere in the world. Some optimistic Canadians have expressed the hope that a new CUSMA will even extend that protection.

But while not mentioning it publicly, Carney and the government appear not to share that optimism. And rightly so.

This past week, Dominic Leblanc, the minister responsible for US trade talks, was in Washington for meetings with US Commerce Secretary Howard Lutnick. The talks were scheduled to last two days. While the opening meeting ran longer than scheduled, the second-day session was cancelled. Leblanc came home early. Not a promising indicator.

Fortunately, a number of cabinet ministers were elsewhere in the world talking up Canadian trade prospects with a number of countries. Most prominent was the Prime Minister himself. Carney visited Germany, Poland and Latvia to briefly talk trade and defence with the leaders of those countries.

His visit to Germany was particularly fortuitous. While there, Canada announced that a Germany/Norwegian company was one of two finalists competing for a multi-vessel contract to build submarines for the Canadian Navy. To underline the development, Carney visited the shipyard where the submarines would be built.

The Germans have to be considered the frontrunners for the contract. Canada wants to be included in the European Union plans for a massive military build-up that could also include existing and new Canadian defence contractors. Having submarines built by the Germans could be an attractive advantage in pushing that hope. Carney also went to Ukraine to underline Canada’s commitment to help defend that country in its protracted efforts to repel Russian domination.

Carney’s trip was a fruitful one. But increased trade with Europe and other efforts to diversify Canadian export markets are going to take time. Not so the CUSMA negotiations. As early as this fall and certainly by next year we will know where Donald Trump and his administration want to go.

Based on what he has indicated in the past, Trump is likely to pursue more restricted access to Canada’s largest trading partner. Only the products the US cannot replace domestically are likely to get welcomed access. Critical earth minerals, potash and electrical and other energy exports are likely to be welcomed.

Otherwise, there is a likelihood that the access Canada now enjoys under the existing CUSMA agreement is likely to disappear. Which is why Mark Carney’s trip to Europe will have to be just one of a series designed to sell Canada and its exports.

Policy Columnist Don Newman is an Officer of the Order of Canada, and a lifetime member and a past president of the Canadian Parliamentary Press Gallery.