What happened
Industry groups in Canada are urging the Canadian and US governments to resume trade talks, warning that the ongoing uncertainty could have permanent negative effects on the economy. The Canadian American Business Council CEO, Beth Burke, told a parliamentary committee that the absence of a trade agreement is deterring business investment and impacting investment decisions in ways that are difficult to reverse.
Business Council of Canada President and CEO Goldy Hyder also stressed the importance of predictability in trade relations, stating that uncertainty is making business leaders reluctant to commit capital and advance major projects. He noted that while businesses can manage tariffs and regulations, uncertainty about the rules under which they will be making investment decisions is much harder to manage.
The breakdown in trade talks came after the US implemented Section 338 tariffs, and Canada responded with matching tariffs. The Canadian government has said that the US had asked for concessions that would impact Canada's sovereignty and trade with other nations.
Experts warn that the lack of a trade deal threatens workers and businesses, with roughly 1.5 million American jobs and 2.4 million Canadian jobs directly linked to the relationship between the two countries. A report commissioned by the Canadian American Business Council found that a successful renegotiation of the Canada-United States-Mexico agreement would add $253 billion to the Canadian gross domestic product over the next decade, while a breakdown would cost $271 billion.
