Canada braces for hardline CUSMA review as Trump talks up reshoring
Trump is signalling he can walk away from the Canada-US-Mexico Agreement (CUSMA) just as the trade deal that anchors North America’s auto supply chains heads into a make-or-break review.
During a visit to a Ford plant in Dearborn, Mich., he called CUSMA “irrelevant” for the US and said “Canada would love it. Canada wants it. They need it,” while urging companies to bring manufacturing back to American soil, according to BNN Bloomberg.
He added “The problem is we don’t need their product. We don’t need cars made in Canada, we don’t need cars made in Mexico, we want to make them here.”
That rhetoric runs directly against how the auto industry actually operates.
The Detroit Three rely on deeply integrated supply chains with significant parts production and vehicle assembly in Canada and Mexico, and they build hundreds of thousands of vehicles a year in both countries, as reported by Reuters.
Major automakers have urged Washington to extend CUSMA, arguing it is crucial to American auto production.
Industry groups have highlighted the cost and competitiveness risks of upsetting that framework.
The American Automotive Policy Council, which represents the Detroit Three, said CUSMA “enables automakers operating in the US to compete globally through regional integration, which delivers efficiency gains.”
It added that the agreement generates “tens of billions of dollars in annual savings.”
General Motors president Mark Reuss said “our supply chains go all the way through all three countries” and called the “whole North American piece” a “big strength,” according to both outlets.
CUSMA, which replaced NAFTA and was negotiated during Trump’s first term, is now up for its first joint review after six years.
BNN Bloomberg reported that the process gives the three countries a choice in July: renew the pact for another 16 years, walk away entirely or do neither.
Trump has already described CUSMA as “transitional” and suggested it may have served its purpose in a meeting with Prime Minister Mark Carney at the White House last year.
Trade officials are preparing for a hard-edged negotiation.
US Trade Representative Jamieson Greer has flagged disputes over Canada’s dairy supply management system and alleged softwood lumber subsidies.
He has also raised concerns about non-tariff barriers, such as the Online Streaming Act, the Online News Act and provincial bans on US alcohol imposed in retaliation for earlier tariffs.
He has also said the administration is considering breaking up the three-way pact and pursuing separate bilateral deals with Canada and Mexico.
Ottawa is already in consultation mode.
A spokesperson for Canada-US Trade Minister Dominic LeBlanc said he will “soon begin discussions” with his US and Mexican counterparts.
He is meeting this week with key sectors and labour unions to shape Canada’s position and stressed that workers’ and businesses’ interests will be “front and centre,” CBC News reported.
Ontario’s trade representative in Washington, David Paterson, told CTV that Trump’s tough talk fits the early stage of negotiations, saying it is “fairly common” for a president to start from “a position of stated dominance.”
Some see Trump’s stance as another warning shot about overreliance on a single market.
Amanda Alvaro, a former Liberal communications strategist, told CBC’s Power & Politics that “nobody can predict what will happen with Trump” or with the renegotiation of CUSMA and argued that Canada should use this moment to broaden its trading relationships beyond the US border.
