CUSMA Breakdown Could Cost Canada 100K Jobs and Trillions in Economic Loss, Report Warns

If the Canada-U.S.-Mexico Agreement breaks down, Canada faces a loss of more than 100,000 jobs while the United States could see more than 200,000 positions vanish, according to a new economic report prepared by Oxford Economics for the Canadian American Business Council. The warning arrives as trade officials race against an August 19 deadline tied to sweeping new American tariffs.

Job Losses and Regional Impacts Under CUSMA Breakdown Scenarios

A collapse of the trilateral trade pact would erase 102,000 jobs in Canada and 214,000 jobs in the United States by 2027, according to data published in the Oxford Economics report cited by The Canadian Press. Conversely, a successful renegotiation of the treaty would generate 98,000 new Canadian jobs and 137,000 American jobs relative to the status quo.

Provinces and states slated to absorb the heaviest blows from a treaty failure include Ontario, Quebec, Manitoba, New Brunswick, Michigan, Indiana, Washington, and Iowa. Beth Burke, CEO of the Canadian American Business Council, emphasized the stakes for regional competitiveness, stating that current choices will dictate North American economic standing for decades to come.

Tariffs, Trade Disputes, and Ongoing Washington Negotiations

The economic warnings emerge alongside an impending U.S. tariff push. President Donald Trump has vowed to enact sweeping 50 percent tariffs on a broad array of Canadian goods starting August 19. Unlike most of U.S President Donald Trump’s other tariffs, these tariffs carry no exemptions for goods that otherwise comply with CUSMA regulations, as reported by The Canadian Press.

The upcoming tariffs respond directly to measures Washington classifies as discriminatory. These include provincial and territorial boycotts on American alcohol products—instituted across several Canadian provinces in early 2025 following prior trade threats—alongside Canadian retaliatory tariffs on U.S. vehicles and auto parts, and dairy import quotas managed under Canada’s supply management system.

High-level diplomatic talks are underway in Washington to stave off the tariff escalation. Canada-U.S. Trade Minister Dominic LeBlanc and Canada’s chief negotiator Janice Charette met with U.S. Trade Representative Jamieson Greer, marking LeBlanc’s third known sit-down with his American counterpart since the tariff threat surfaced. “Discussions remain ongoing, and we continue to engage at the negotiation table to firmly advance and defend Canadian interests,” LeBlanc posted on X.

Annual Review Friction and Business Predictability

Adding to the structural instability, Washington declared in July that it will not renew the trade pact—known as the USMCA in the United States—in its current form. That decision forces an annual review process for the agreement, which introduces compounding volatility for cross-border enterprises seeking long-term operational predictability.

Cash flow and regulatory stability remain primary concerns for industrial operators across the continent as negotiations continue ahead of the mid-August deadline.