CUSMA’s demise could wipe out 100K Canadian and 200K U.S. jobs: report

A new report says 100,000 jobs in Canada and more than 200,000 jobs in the U.S. could be lost if the Canada-U.S.-Mexico trade deal falls apart.

It comes as Canada’s top negotiators are once again in Washington trying to work out a trade deal before the Trump administration introduces another round of punishing tariffs on our country.

Advocating for cross-border commerce, a new report from the Canadian American Business Council warns 102,000 jobs in Canada may be lost if the CUSMA trade pact dies.

And the job losses in the U.S. would be 214,000 next year alone.

“If CUSMA was broken, Canada would be facing, in today’s environment, something probably in the range of 10 to 15 per cent on all of our exports … that absolutely would destroy a lot of jobs, and it would be very painful for the United States as well,” said Joseph Steinberg, a University of Toronto economics professor and trade and tariff expert.

Manufacturing jobs directly impacted by American tariffs would be hard hit, of course.

But the report says so would service sector jobs, as lower levels of disposable income lead to lower spending, trade and investment — which lead to lower demand for transportation, construction and professional services.

“Right now the vast majority of our exports to the United States are still tariff free,” Steinberg said.

WATCH MORE: U.S. announces new 10% tariff on 60 countries, including Canada

Steinberg says CUSMA has protected Canadian goods from most American tariffs except for some — like the sectoral tariffs on steel and aluminum.

So its death would remove that protection.

“If we see tariffs on everything else outside of those specific sectors go up to 10 or 15 per cent … we’d see our exports to the United States drop quite dramatically … something on the order of between 20 and 40 percentage points,” Steinberg said.

If the deal falters, the report says Ontario would be one of the provinces hardest hit — with deep impacts to the auto industry, as well as metals, machinery, electronics, chemicals and forest products.

But on the flip side, the report says if CUSMA is successfully renegotiated, Canada could gain another 98,000 jobs, and the U.S. could get 137,000 new jobs.

Steinberg isn’t sure about those numbers but says a deal would eliminate the current tariff and trade uncertainty in the business community. “And in turn, make it a lot more willing to invest in expanding their production at home, hiring more workers,” Steinberg added.

Canada-U.S. Trade Minister Domenic LeBlanc hasn’t commented specifically on what is being talked about this week in Washington, but some Canadian media are reporting the Canadian delegation isn’t impressed with the latest U.S. proposal.

The Trump administration is set to impose another round of tariffs beginning on Aug. 19.

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