Full Breakdown
Potential Fallout of a CUSMA Breakdown and Ongoing Trade Talks
8/12/2026, 4:13:43 AM
Core Event
A new Oxford Economics report prepared for the Canadian American Business Council analyzes three possible outcomes of the current Canada-U.S.-Mexico trade negotiations. If the Canada-U.S.-Mexico Agreement (CUSMA) collapses, the study projects the loss of 214,000 U.S. jobs and 102,000 Canadian jobs compared with a status-quo scenario. Conversely, a successful renegotiation could create 137,000 U.S. jobs and 98,000 Canadian jobs. The report also estimates that a breakdown would shave $1.04 trillion US from U.S. GDP and $271 billion Cdn from Canadian GDP by 2035, while raising inflation and curbing real disposable income, especially in Canada.
Background & Context
Negotiators are racing against a looming deadline for new 50 percent tariffs on a range of Canadian products that together account for roughly five percent of Canada’s exports to the United States. Trade Minister Dominic LeBlanc and Chief Trade Negotiator Janice Charette met in Washington on June 2, 2026, and have held multiple recent talks with U.S. Trade Representative Jamieson Greer to present a possible deal to President Donald Trump before the tariff deadline.
Data & Statistics
- Manufacturing impact (worst-case): Auto, wood product, and metal product sectors in the United States; Quebec and Ontario in Canada would suffer the greatest job losses.
- Provincial exposure: Ontario, New Brunswick and Quebec face the steepest hit from tariffs; Saskatchewan, Alberta and Newfoundland and Labrador are projected to fare better.
- Sectoral exposure (if tariffs imposed): Cement and concrete manufacturers would be hardest hit, followed by paper, wood, computers, electronics, plastics and rubber producers.
Official Statements & Responses
She noted that any agreement will require concessions from both sides. LeBlanc reiterated that Canada remains committed to a deal that avoids the 50 percent levies and protects manufacturing hubs.
Verbatim Quotes
- “It means real jobs and security and stability [lost] at a time where affordability is front and centre for so many Canadians and Americans,” — Beth Burke, the CEO of the Canadian American Business Council
