The canadian and mexican negotiators’ perspective on the cusma and trump’s tariffs

The Canadian and Mexican architects of the Canada-U.S.-Mexico Agreement (CUSMA) have expressed their deep concerns over the recent trade actions taken by U.S. President Donald Trump, which they believe have effectively undermined the agreement. Steve Verheul, Canada’s chief negotiator, and Ken Smith Ramos, Mexico’s chief negotiator, have stated that the 25% tariffs imposed by Trump on their countries essentially suspend the CUSMA, rendering it almost worthless. Verheul emphasized that these tariffs "blow a complete hole in the trade agreement," leaving Canada and Mexico in a worse position than any other country globally. The tariffs, which were imposed on Tuesday, also include a 10% levy on Canadian energy products.

canada’s and mexico’s response to trump’s tariffs

In response to these tariffs, Canada and Mexico have announced retaliatory measures. Canada has imposed tariffs on $30 billion worth of American goods, with an additional $125 billion set to come into effect 21 days later. Mexican President Claudia Sheinbaum has also announced that her government will impose duties on targeted products and other measures, which were to be revealed on Sunday. Sheinbaum criticized Trump’s decision, stating that there is no justification for these tariffs, which will negatively impact the people and nations involved. Both countries have made it clear that they view these tariffs as unjustified and harmful to their economies.

the rationale behind trump’s tariffs and the concern over fentanyl

Trump’s decision to impose these tariffs was made using the International Economic Emergency Powers Act, a national security statute that allows the president to control economic transactions during emergencies. The rationale provided for these tariffs is the alleged influx of fentanyl from Canada, which Trump claims is a national security threat. However, U.S. Customs and Border Patrol data shows that only a minimal amount of fentanyl—just 13.6 grams—was seized at the northern border in January. Verheul has repeatedly stated that using fentanyl as a pretext for imposing tariffs on Canada is unjustified, calling the move "absolutely unnecessary."

the impact on cusma and the potential consequences

The tariffs have caused significant concern among the architects of CUSMA, who fear that these measures could lead to the collapse of the agreement. Prime Minister Justin Trudeau has accused Trump of wanting to see a total collapse of the Canadian economy, which would make it easier for the U.S. to annex Canada. Canada has already announced plans to file claims against the tariffs with the World Trade Organization (WTO) and through the CUSMA dispute resolution mechanisms. Verheul and Ramos have joined forces with Kevin Brady, a Republican and former chairman of the House Ways and Means Committee, to form the Coalition for North American Trade, aiming to preserve the economic and security benefits of the agreement.

the economic and political fallout

The tariffs have already caused a tumultuous week on Wall Street, marking the first major test of Trump’s expanding tariff plan. Trump also imposed 25% tariffs on all steel and aluminum imports into the U.S. on March 12, which will stack on top of the existing tariffs on Canada. Additionally, Trump has signed an executive order to implement "reciprocal tariffs" starting April 2, targeting products such as automobiles, copper, lumber, and agricultural goods. While Trump granted a one-month exemption for vehicles imported through CUSMA after discussions with major automakers, the stacking of tariffs has made it increasingly difficult for Canada and Mexico to justify prioritizing trade with the U.S.

the future of cusma and the potential outcomes

The future of CUSMA remains uncertain, with a mandatory review scheduled for 2026. The agreement could be tweaked, renewed for another 16-year term, or one of the partner nations could pull out entirely. Another possible outcome is that the Trump administration or another country could withhold renewal, delaying the decision for 12 months and prolonging market uncertainty. Verheul and Ramos have expressed their preference for tweaking the agreement, but given the current geopolitical environment, this seems unlikely. Canadians and Mexicans are increasingly viewing the U.S. as an unreliable trading partner, and the collapse of CUSMA could have damaging impacts on millions of workers and families across North America. The situation continues to unfold, with both Canada and Mexico preparing for further escalations in the trade war.