B.C. Businesses Face Uncertainty as CUSMA Review Looms

British Columbia businesses are bracing for potential uncertainty as the Canada-United States-Mexico Agreement (CUSMA) undergoes a review next week. The trade deal, which came into effect six years ago, will be assessed by the three North American nations, with options to either formally extend it for 16 years or maintain annual reviews.

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It’s hard to know from the outside of the negotiating table.

B.C. Premier David Eby described himself as a spectator regarding Prime Minister Mark Carney's trade talks, acknowledging the difficulty of understanding negotiations from the outside. However, concerns are mounting, particularly as U.S. President Donald Trump has publicly stated his preference for terminating CUSMA. This stance has created significant unease, especially for sectors like forestry, which are already grappling with sectoral tariffs and a lack of immediate relief.

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The U.S. has decided that no, this is going to be more than that, it’s going to be some wholesale renegotiation and if you don’t agree to the terms of this renegotiation, we might exit this altogether.

William Pellerin, an international trade lawyer at McMillan LLP, noted that the U.S. might seek wholesale renegotiations and could exit the agreement if its terms are not met. Laura Jones of the Business Council of B.C. anticipates a "bumpy ride" with the U.S. over the next six months. Despite Trump's threats, Eby emphasized the devastating impact on American industry if the U.S. were to withdraw, highlighting the extensive cross-border activity that relies on the current trade structure. A report from the U.S.-based Tax Foundation suggests that free trade has been vital to the U.S. economy, and removing tariff exemptions could cost American households approximately $300 each in 2027.

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What I expect for the next six months is that it’s going to continue to be a bumpy ride with the U.S.