Study from Deloitte predicts a big hit unevenly spread across different sectors, and recommends more free trade with other nations and between provinces
A U.S. withdrawal from the Canada-United-States-Mexico trade agreement (CUSMA) would have a “severe but not cataclysmic impact on Canada’s overall economy, although perhaps cataclysmic for some sectors,” according to a new report released this week by Deloitte Canada.
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The report is titled “Tariffs: A rough road leads to new destinations,” and imagines two broad scenarios in the near future.
In the first, the “CUSMA Withdrawal Scenario,” the U.S. opts out of CUSMA entirely. “Trade resets at Most-Favoured-Nation rates that apply to member countries in the World Trade Organization,” the report says. It assumes a 10 per cent global tariff imposed by the U.S. affects previously CUSMA-exempt sectors, including oil and gas.
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“There is potential for much worse if the Trump administration imposes further punitive tariffs on Canadian goods, as it has stated will happen in January,” the report notes, but it’s uncertain how long they would last and whether they would withstand legal and political challenges.
