A new analysis warns that if the Canada-U.S.-Mexico Agreement fails, it could result in significant job losses and economic repercussions on both sides of the border. The report, commissioned by the Canadian American Business Council and conducted by Oxford Economics, examined three potential outcomes of the ongoing trade discussions between the U.S. and Canada.
In the event of the agreement’s collapse, approximately 214,000 American and 102,000 Canadian jobs would be at risk compared to the current scenario with existing tariffs. Conversely, successful renegotiation of the agreement could lead to job gains of 137,000 in the U.S. and 98,000 in Canada.
The CEO of the Canadian American Business Council, Beth Burke, emphasized the importance of the trading relationship between the two countries, stating that it has a significant impact on job security and economic stability. The repercussions extend beyond employment to GDP effects, with projections indicating potential costs of $1.04 trillion for the U.S. economy and $271 billion for Canada by 2035 if the agreement fails.
The report highlights that a breakdown in the agreement would particularly impact manufacturing industries in both countries, with sectors such as auto, wood products, and metal manufacturing facing significant losses. The regions most affected would include Iowa, Michigan, Kentucky, Alabama, Quebec, and Ontario.
As the deadline approaches for new tariffs on Canadian exports, efforts are ongoing to reach a resolution before the looming trade restrictions take effect. Trade representatives are actively engaged in negotiations to present a potential deal to U.S. President Donald Trump. Both Canadian and American officials are prepared to make concessions to secure a trade agreement.
The potential consequences of failed negotiations are concerning, with projections indicating adverse effects on various manufacturing sectors. The report underscores the need for a collaborative effort to avoid detrimental economic impacts on both countries.
