What happens to Canada if CUSMA is not renewed?

The Canada-United States-Mexico Agreement (CUSMA) is currently being reviewed, with its future hanging in the balance. Related uncertainties, compounded by earlier tariffs imposed by the U.S., have already hurt Canada’s economy, as evidenced by delayed investment and weak hiring by firms. In this Economic and Financial Market Update, we look at possible CUSMA scenarios and what those could mean for the economy going forward, including the Bank of Canada’s policy rate.

U.S. tariffs are hammering the Canadian economy
Statistics Canada recently estimated that about 16% of Canada’s GDP and 12% of jobs depend on the production of exports destined for the U.S. So, trade negotiators know very well what’s at stake as they attempt to strike a deal to renew the Canada-United States-Mexico Agreement (CUSMA).

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