Donald Trump’s economic aggression towards Canada and Mexico has crossed a line, effectively nullifying the Canada-U.S.-Mexico Agreement (CUSMA). His decision to slap sweeping tariffs on North American trade partners—just two years before the agreement’s mandatory review—feels less like a strategic move and more like an effort to bully America’s closest allies into submission.
Canada’s chief negotiator, Steve Verheul, and Mexico’s chief negotiator, Ken Smith Ramos, are right to call these tariffs what they are: a gut punch to the very foundation of North American trade. With a staggering 25% levy, the trade agreement is rendered virtually meaningless. How can Canada and Mexico see value in a deal that now leaves them worse off than countries without any trade pact with the U.S.?
Trump’s justification? A flimsy national security excuse, citing an emergency over fentanyl at the Canadian border. Yet, the U.S. Customs and Border Patrol’s own data undermines this claim, showing an insignificant amount—just 13.6 grams—of fentanyl seized in January. It’s a weak cover story for what looks like another one of Trump’s strong-arm tactics.
Canada has responded forcefully with $30 billion in retaliatory tariffs on U.S. goods, with another $125 billion in duties looming. Mexico is set to follow suit. These are not just tit-for-tat measures; they are acts of survival in an increasingly hostile trade relationship.
And it gets worse. Trump’s tariff spree includes a 25% hike on steel and aluminum imports, which the White House has confirmed will stack on top of the existing tariffs against Canada and Mexico. A so-called “reciprocal tariff” policy will soon target autos, copper, lumber, and agricultural products. The economic impact on both sides of the border is clear: higher costs, disrupted supply chains, and job losses.
The timing of these tariffs, so close to the CUSMA review in 2026, is no accident. The agreement requires a joint decision by Canada, Mexico, and the U.S. to either renew, amend, or scrap the deal entirely. If one country refuses to renew, it could send the region into economic uncertainty. Given Trump’s hostility, it’s not a stretch to imagine the U.S. walking away altogether, throwing decades of North American trade cooperation into disarray.
Prime Minister Justin Trudeau didn’t mince words when he suggested that Trump wants to see Canada’s economy collapse, making it easier to annex the country. While this may sound extreme, the economic reality is already dire enough. Canadian and Mexican businesses are being forced to reconsider their reliance on the U.S. market. If trade with America is now subject to arbitrary tariffs, why prioritize it?
This situation has led to the formation of the Coalition for North American Trade, a partnership between Verheul, Ramos, and former U.S. Representative Kevin Brady. Their goal is to protect the economic and security benefits of CUSMA, which Trump himself once called “the best agreement we’ve ever made.” How quickly things change.
Trump’s recklessness is already causing chaos on Wall Street, proving that these tariffs are not just a burden on Canada and Mexico but on the U.S. itself. Automakers, in particular, have sounded the alarm, prompting a temporary one-month exemption for vehicle imports. But this is just a bandage on a self-inflicted wound.
Ramos summed it up best: When tariffs stack up to 50% or more, it becomes impossible to justify prioritizing trade with America. And that’s the real danger here. If Canada and Mexico start looking elsewhere for trade, the U.S. will lose two of its largest customers. This is not economic patriotism—it’s economic self-sabotage.
As the 2026 review approaches, the future of North American trade is in jeopardy. The ideal scenario would be a simple tweaking of the agreement, but given the current political climate, that’s wishful thinking. If Trump’s tariffs remain in place, Canada and Mexico may have no choice but to move on without the U.S.
And when that happens, Trump will have no one to blame but himself.
