OTTAWA — Canada could lose 102,000 jobs if the Canada-U.S.-Mexico agreement on trade breaks down, a new report warns. The report, prepared for the Canadian American Business Council by Oxford Economics, studied the potential economic consequences of various CUSMA scenarios, including termination of the deal. The report says the United States would lose 214,000 jobs in 2027 if CUSMA died. “Many of these jobs would be in manufacturing industries directly impacted by tariffs, but the service sector would also feel the impact as lower disposable income causes households to reduce consumer spending and lower trade, and investment reduces demand for transportation, construction and professional services,” says the report. The successful renegotiation of CUSMA, it says, would create 137,000 American jobs and 98,000 Canadian jobs. The report says the provinces and states affected most by the loss of CUSMA would include Ontario, Quebec, Manitoba, New Brunswick, Michigan, Indiana, Washington and Iowa. For Canada, the industries facing the deepest impacts from the loss of CUSMA would include autos, metals, machinery, electronics, chemicals, wood products and paper products, the report says. A new round of 50 per cent American tariffs on a range of Canadian goods is set to take effect on Aug. 19. Unlike most of U.S President Donald Trump’s other tariffs, these would have no exemptions for goods that comply with CUSMA. Canada-U.S. Trade Minister Dominic LeBlanc is back in Washington this week for another round of trade talks. Canada’s trade team has met with U.S. Trade Representative Jamieson Greer twice in the past two weeks. LeBlanc’s spokesman Gabriel Brunet said on Sunday the talks have broadly covered the threatened new duties, existing sectoral tariffs and renegotiations of CUSMA. The report says an estimated 1.4 million American jobs and 2.5 million Canadian jobs depend on the bilateral trade relationship. “Reversing this integration would not merely remove its direct benefits but would also impose substantial transition costs on businesses forced to rebuild intricate supply chains created over decades and incur long-run efficiency losses,” it says. The report says current tariffs represent a “significant departure” from pre-2025 levels. “However, the termination of (CUSMA) would result in large increases in both countries’ tariffs,” the report warns. “A successful renegotiation of (CUSMA) would cause bilateral tariffs to fall close to their pre-2025 levels of around one per cent, as in this scenario only limited additional tariffs are assumed to remain on steel, aluminum and Canadian dairy.” This report by The Canadian Press was first published Aug. 11, 2026.
