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7h ago

U.S. and Canada to Open CUSMA Review in January

Experts warn the tariff exemption that kept most Canadian exports duty-free in 2025 is now a prime target.

A sign for Duty Free at the Canada/U.S. border crossing in Saint-Bernard-de-Lacolle, Que., Thursday, April 10, 2025. THE CANADIAN PRESS/Graham Hughes
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Overview

  • Prime Minister Mark Carney confirmed Canadian officials will meet U.S. counterparts in mid-January to launch formal discussions, with Trade Minister Dominic LeBlanc set to travel to Washington.
  • U.S. officials have flagged specific grievances for the talks, including access to Canada’s dairy market, impacts of the Online Streaming and Online News Acts, and provincial restrictions on American alcohol.
  • The Trump administration’s tariff program includes a 35% blanket levy and sector-specific duties such as on steel and aluminum, yet about 90% of Canadian goods entered the U.S. tariff-free by July through CUSMA compliance, which applies only to the blanket tariff.
  • The 2026 review offers three paths: a 16-year renewal, withdrawal, or a non-renewal that triggers annual reviews, and Trump has suggested the pact could be allowed to expire.
  • Economists caution that narrowing or ending the CUSMA-based exemption could inflict lasting damage on Canada’s economy, as prior bilateral talks on sectoral tariff relief were halted and are expected to be folded into the review.