WHY IT MATTERS: Conversations between Canadian and American agriculture groups could help set a tone ahead of the CUSMA review this summer.

Hoekstra spoke at the Canadian Crops Convention in Toronto on March 12.

He said tariffs are likely to stay on as cost of doing business in the American market. Canada should “do everything they can to get into the lowest tariff buckets.”

“You can make compelling cases for us to do business with Canada and Canada to get the lowest tariffs of any trading partner in the world,” Hoekstra said.

U.S. and Canadian businesses both need to advocate for that relationship.

Cross-border relationships

Some in the Canadian agriculture sector say that advocacy is already underway.

Michael Harvey, executive director of the Canadian Agri-Food Trade Alliance said many Canadians have been advocating for cross-border business relationships. Last fall, CAFTA led a trade mission to Washington D.C. involving 12 national industry groups. The group’s goal was to highlight the importance of renewing the Canada-U.S. Mexico Agreement.

Pierre Petelle, CEO of CropLife Canada, said he has seen U.S. farm groups openly support CUSMA over the last six months — something not common in the early days of the second Trump presidency.

“That puts us in a much, much better position,” he said.

Canada shouldn’t overestimate its value: Hoekstra

When negotiating trade, Hoekstra said Canada must not overestimate its value to the American market.

“We don’t wake up in the morning worried about Canada,” he said. “You don’t find Americans advocating … ‘boycott Canadian products.”

“When you walk into the negotiating team, or you get on TV and you say, ‘America needs our fill-in-the-blank,’ whatever commodity you’re talking about, you’re going to get a certain kind of response,” Hoekstra said.

“Because for just about everything that you bring in, it’s kind of like, ‘no, we really don’t.’”

The U.S. has done a good job of diversifying its markets and cultivating long-term relationships said Darcy Pawlik, executive director of the Wheat Growers Association. This gives some truth to the idea it doesn’t need Canadian imports.

“They’ve done the diversification of their procurement already,” Pawlik said. “Canada, we have really not carried the ball in a mature way, from a trade perspective internationally, from diversifying markets.”

Canada may have some commodities American need, but Pawlik said in many cases it has found other options.

‘We should always aim for free trade’

Hoekstra suggested pitching why doing business with Canada is a “phenomenal deal” for the United States.

“You will get a much different response in Washington than coming in and saying, ‘you absolutely need our stuff.’”

A compelling case could land Canada in the lowest tariff bucket, the ambassador said.

Being in the lowest bucket shouldn’t be Canada’s goal, Pawlik said.

“We need to always aim for zero-tariff,” he said. “We should always aim for free trade.”

“If there’s some points of negotiation that the Canadian government just can’t find a way to work together on and we end up in that lowest tariff bucket, then so be it. But we should never start from a place of being OK with some tariffs. We’ve got to aim for zero.”

Integration of supply chains a key bargaining point

Entering negotiations with a “we have what you need” approach could indeed be harmful, as it will only upset Trump and his administration said Patrick Leblond, a professor at the University of Ottawa’s Graduate School of Public and International Affairs, in an email to Glacier FarmMedia.

However, the U.S. is not entirely self-sufficient.

“Yes, Canada has some of what the U.S. needs, but we’re not the only ones,” Leblond wrote, adding the U.S. has more leverage than Canada on this issue.

Petelle said it may be important to consider the integration of Canada-U.S. supply chains as opposed to what goods one country needs over the other.

Whether crop protection products and seed, or processing and feed, the supply chain is “extremely integrated,” he said.

In the seed and crop protection sector, Canada probably needs the U.S. more than it needs Canada, Petelle said.

“We import a lot of our seed directly from the U.S. and other regions. A lot of the manufacturing of crop protection is done in the U.S. … so we’re pretty reliant on the input side for seed and crop protection.”

Canada and the U.S. “really produce food together,” Harvey said citing examples of beef crossing the border to be processed and Canadian wheat going to an American plant before being sent back to Canada.

“We’ve really got this deeply integrated production model, and it would be very negative for American interests for that model to be … gummed up,” he said.

American agri-food sector on board with CUSMA

“I think the most important thing is to have American interests who are in favor of the relationship,” Harvey said, “we’re seeing it really clearly that the American agri-food sector is in favor of continuing the treaty.”

In February, 40 American agricultural organizations formed a coalition to support CUSMA. Nearly 100 Canadian groups made a similar plea in December.

Petelle said this alignment between American and Canadian groups is a positive signal and could mean the beginnings of good negotiations between the two countries.

Despite his assertion there will always be a cost of entry in the American market, Hoekstra said the U.S. is interested in renewing CUSMA.

Pawlik said Canadian commodity groups should start talking with their U.S. counterparts ahead of the CUSMA review this summer.

“Wheat organizations talk to the wheat organizations, you know, and soybeans talk to soybeans… so that when they get to the negotiating floor, they can say, ‘hey, no problem. We’ve actually got industry leading these conversations. We’re figuring out ways to get along.’”

‘Get back to the table’

Hoekstra said negotiations around the trade agreement have been stalled by headwinds from Canada. He said there “hasn’t been a substantive discussion since the end of October” between the two countries.

Petelle said he saw things differently.

“It was interesting to hear the ambassador characterize it as ‘four months lost,’” he said. “Last time I checked, it was the U.S. that broke off the discussions.”

“We’ve had several months of nothing really moving, but I think that decision was theirs last fall,” he continued. “So, the first thing is to get back to the table and start having serious conversations, rather than through the media or through public statements by ambassadors and others.”

Pawlik said many Canadians would do well to have a better understanding of CUSMA and how tightly connected the two countries really are.

“The one thing that we continue to forget is that we are allies, right?” he said. “(We should) treat each other with maybe a little bit more respect than what we’ve been seeing to date, and that should be encouraged amongst all Canadians.”

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Speaking on Thursday at the Canadian Crops Convention in Toronto, he said the U.S. believes CUSMA, known as USMCA in the U.S., has worked well but there have been no “substantive” talks with Canada since October.

The Canadian minister responsible for Canada-U.S. trade met with his counterpart, U.S. Trade Representative Jamieson Greer, last week.

“I think we want to get to an agreement, but we are facing some headwinds in the negotiations,” Hoekstra said, citing a lack of “substantive” discussions since October.

Hoekstra said:

• Canada should do everything it can to get into the lowest tariff buckets.
• The U.S. is looking for coalitions with countries that will make sure that if there are trade agreements, then the non-tariff trade barriers are removed.
• U.S. President Donald Trump has said there will be some tariff for getting access to the U.S. market so the Canadian government and businesses should make the case why it is beneficial for the U.S. to do business with Canada at the lowest tariff rate.
• Canada and the U.S. can also work more closely on energy. The U.S. already imports a lot of oil and natural gas from Canada, the U.S. processes much of this energy, and it would want to expand the partnership.
• Canada should also build a stockpile of critical minerals in Canada or the U.S. to use during emergencies. Canada has many critical minerals and it should develop a full supply chain to become an ideal partner for the U.S.

The office of the Canadian Minister Dominic LeBlanc, who is responsible for Canada-U.S. trade, said that
Canada remains committed to establishing a new economic and security relationship with the United States that will deliver for workers and businesses on both sides of the border.

“The Minister looks forward to further engagement with his American and Mexican counterparts over the coming months as we undertake the trilateral and bilateral review of the Canada-United States-Mexico Agreement.”

— Additional reporting by Promit Mukherjee in Ottawa

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CUSMA replaced the North American Free Trade Agreement (NAFTA), which was active from 1994 to 2020. The current trilateral agreement allows producers in all three countries to trade with each other in a mostly tariff-free environment.

WHY IT MATTERS: The review of CUSMA could set the stage for a new era of trade and tariffs between Canada and the U.S.

U.S. President Donald Trump has consistently expressed his displeasure with CUSMA despite the fact that it was negiotiated during his first administration.

Prime Minister Mark Carney has also claimed the relationship Canada thought it had with the U.S. is over, signalling a possible new era in North American trade.

According to Patrick Leblond, a professor at the University of Ottawa’s Graduate School of Public and International Affairs, it is unlikely the three countries will return to the original mode of tariff-free trade under CUSMA.

“It sounds like the Americans are not in a compromising mood,” Leblond said. “It sounds like, ‘Okay, we’re going to put the gun to your head, and you’re going to give us what we want.’”

Can the U.S. pull out of CUSMA?

Any of the three parties may leave the agreement as long as they provide six months’ notice, but Leblond said nothing is stopping the U.S. from taking more drastic action.

He also said there is nothing forcing the parties to start negotiating on July 1, the official start of the review.

“The reality is, … the U.S. can just pull out and say, ‘yeah, as of tomorrow, we are not applying (CUSMA) anymore,” said Leblond. “We’re pulling out and we don’t care about the six months’ notice.’”

“The sort of attitude would be, ‘well, just sue us.’”

If Canada and Mexico were to sue, a panel of arbitrators would likely rule the U.S. at fault and give permission for the two countries to retaliate with tariffs.

It would still be on Canada and Mexico to decide how to react.

“It’s a bit of a moot point where yes, the U.S. legally has to give notice, but in practice, they can do what they want.”

It leaves Canada in a precarious place, especially as the terms of the agreement may not feel permanent.

“The Trump administration ultimately cannot be trusted,” Leblond said. “And therefore, yes, we can negotiate, we can try to come to a deal, but we have no guarantee whether that deal will be respected. And even existing deals are not being respected.”

U.S. could face challenges in leaving the agreement

Michael Harvey, Executive Director of the Canadian Agri-Food Trade Alliance (CAFTA), said it’s unlikely Trump will pull out of the agreement completely.

Under the American system, the President would need congressional approval for major changes. Harvey said this could be a problem for Trump, who is already seeing pushback on his tariffs including a recent Supreme Court challenge.

“Significant changes to the treaty would require going to Congress, and we haven’t seen the administration be all that interested in going to Congress with trade agreements,” Harvey said.

There could also be disagreement within the administration’s base. Harvey said in the two trade missions it took to Washington D.C. last year, CAFTA started to see increased doubt about the tariff agenda amongst Republicans, particularly in agriculture states.

U.S. producer groups have also shown support for a CUSMA renewal.

“That’s really positive, because first, it’s our direct counterparts in the United States,” Harvey said. “Second, the agri-food sector, let’s face it, they tend to be supporters of President Trump. So, it’s a positive thing for supporters of President Trump to be so in favor of the agreement.”

“Tariffs mean increased cost for consumers, for producers,” he said. “We’ve been working hard at making sure that decision-makers understand that, and what we’ve seen in Washington is that they do, and it’s great to see the U.S. ag sector being sold about it.”

Trump has also protected the agri-food elements of the agreement. When the President imposed tariffs on Canada, CUSMA-compliant agri-food goods were exempted.

What’s Canada’s best-case scenario?

Harvey said the best-case scenario for Canada would be a full renewal with some minor updates on agricultural technology, but “just renewal with no changes at all would be a great-case scenario.”

The deal works well for the agri-food sector.

“It’s one of the best agreements in the world,” Harvey said. “We’ve got three countries working together, highly integrated supply chains, highly integrated markets. That’s something that we need to protect.”

It’s still likely Trump will hardball in the initial negotiations.

“He has a style that attracts attention to his demands,” Harvey said. “His demands are often quite high at the beginning of a negotiation and often change quickly.”

Leblond also called it a best-case scenario for Canada to maintain the current terms, but suspected the U.S. would continue to push for more access in Canada, particularly in supply-managed sectors.

“If we can play for time and try to maintain the status quo, to me that would be the best option for now for Canada,” he said. “And hopefully then, … for a lot of the agricultural goods that we export to the U.S., they will continue to be exported without tariffs because we meet the rules of origin.”

That’s why both sides seem to be pushing for “just don’t make things worse,” Leblond said.

“Talk, engage, negotiate, but don’t look for a quick deal,” he said. “That that would be my view.”

Bilateral vs. trilateral negotiations

Leblond said the U.S. could push for bilateral negotiations instead of trilateral, meaning individual meetings with Canada and Mexico.

This could weaken the leverage Canada and Mexico would otherwise have working together.

Leblond said there are three likely options.

“One is really trilateral negotiations, comprehensive,” he said.

“There’s the (option) we renew CUSMA, but the U.S. negotiates bilaterally with Canada, bilaterally with Mexico, and then they try to fit that within the existing CUSMA.”

Or the countries could make bilateral deals outside of CUSMA.

There is precedent for this, as the U.S. recently negotiated a new deal with South Korea which goes against the countries’ existing agreement. The free trade agreement is still there, but it’s superseded by the new deal.

“Is that what the Americans are going to try to push with Canada on the one hand and Mexico and the other? It’s very possible,” Leblond said.

The ever-present possibility of the U.S. pushing more tariffs on Canada should be motivation for the government to seek other trade deals in the interim, he added.

Carney and other government officials have recently taken several trips to countries like India and Vietnam.

Longer-term, reducing dependency on the U.S. is a good idea, Leblond said.

“Even if we have a deal, let’s say some kind of renegotiation, a deal that we reach with the U.S., what’s the guarantee that that deal is going to hold? There is none.”

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The pledges are part of the Trump administration’s 2026 Trade Policy Agenda, issued over a week after the Supreme Court struck down President Donald Trump’s tariffs under the International Emergency Economic Powers Act.

Here are some key details of the agenda:

• The U.S. will seek to fix deficiencies in the Canada-U.S.-Mexico trade agreement (CUSMA), including on regional rules of origin and challenges created by investment from non-market economies and industrial overcapacity.
• The U.S. will seek to manage bilateral trade with China for better balance and fairness and monitor China’s compliance with a trade truce reached last year.
• The Trump administration will work to strike new trade deals with partners and finalize framework deals with the European Union, India, Japan, North Macedonia, South Korea, Switzerland, Liechtenstein, Thailand and Vietnam.
• The U.S. will finalize deals with Argentina, Bangladesh, Cambodia, El Salvador, Guatemala, Indonesia, Malaysia and Taiwan, and enforce all of its agreements through existing trade laws.
• The U.S. will evaluate whether new “Section 301” unfair trade investigations are needed to address global overcapacity, abuses in seafood and fisheries, export-driven agricultural policies, pharmaceutical pricing and digital services taxes.
• The administration will seek to bring back to the U.S. supply chains for critical minerals, semiconductors, auto parts, pharmaceuticals, medical equipment, metals and energy technologies.
• The U.S. will seek to attract foreign investment while ensuring that this will not imperil national security.
• The U.S. will seek to advance its trade interests through the G7, G20, Organization for Economic Cooperation and Development and World Trade Organization.
• The Trump administration sees limited opportunities for WTO reform but will urge reassessments of “most favored nation” tariffs to pursue bilateral agreements.

— Reporting by David Lawder

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“They have a few ideas on how they might want to have a deal with us. We’re obviously open to that,” Greer said in an interview on Fox Business Network.

WHY IT MATTERS: Canada and U.S. agricultural supply chains are heavily integrated and could face disruption, depending on the outcome of the CUSMA review.

Greer said he spoke with his trade counterpart earlier on Wednesday and that they would meet in Washington “in a couple weeks.”

“We’re open to talk, and we’ll see what they have to say,” Greer told FBN’s “Mornings with Maria” program.

Representatives for Canada-U.S. Trade Minister Dominic LeBlanc did not immediately respond to a request for comment.

U.S.-Canada tensions have grown in recent months over trade and other issues as Trump has targeted Washington’s northern neighbor.

The Trump administration is reviewing the Canada-United States-Mexico trade pact enacted during Trump’s first term in the White House term and faces a July 1 deadline to notify Congress whether it plans to change the agreement.

‘Reshoring’ not moving fast enough: Greer

Greer said U.S. officials are focused on moving production of cars and other goods back to the U.S. But the reshoring of critical supply chains is not happening fast enough under the current pact, he said in a separate interview with CBC News, expressing concern that China will funnel goods through Canada to avoid certain tariffs as Beijing and Ottawa seek to develop closer ties.

“We don’t want a situation where Canada’s being used as a back door for Chinese goods,” he told CBC reporter Katie Simpson late on Tuesday in a video posted on X.

“If Canada wants to agree that we can have some level of higher tariff on them while they open their markets to us on things like dairy and other things, then that’s a helpful conversation,” Greer added.

Trump has said Washington could leave CUSMA and strike separate deals with Canada and Mexico as his administration pursues separate talks with each bordering country.

Greer told Bloomberg Television on Wednesday that he would continue separate negotiations with representatives of Canada and Mexico over the coming year “because our relationships with those countries are so different.”

One solution could be to “tack on” separate protocols for each nation onto CUSMA “to fix some of the gaps,” he said.

— Additional reporting by Promit Mukherjee

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The tariff will be “over and above our normal tariffs already being charged,” Trump said in a media briefing.

“The Supreme Court did not overrule tariffs. They merely overruled a particular use of IEEPA for tariffs.”

Trump said his administration would also launch several investigations “to protect our country from unfair trading practices of other countries and companies.”

WHY IT MATTERS: While Canadian agricultural goods largely escaped tariffs under the CUSMA trade agreement, U.S. President Donald Trump’s on-again, off-again tariffs created significant uncertainty.

Trump signed an executive order later Friday imposing a 10 per cent ad valorem tariff to take effect on articles imported into the U.S. starting Tuesday (Feb. 24).

Section 122 allows the president to impose duties up to 15 per cent or quotas for up to 150 days, the Retail Industry Leaders Association explained in a post.

“Specifically, Section 122 allows the President to impose duties of up to 15 per cent or quotas for up to 150 days on imports from all countries, or selectively against countries that maintain unjustifiable or unreasonable restrictions on U.S. commerce.”

The new 10 per cent tariff will not be imposed on any CUSMA-compliant “goods of Canada and Mexico,” the White House said in a fact sheet later Friday.

Nor will it be imposed on “certain agricultural products, including beef, tomatoes, and oranges.”

Other imports exempt from the new tariff will include “natural resources and fertilizers that cannot be grown, mined, or otherwise produced in the United States or grown, mined, or otherwise produced in sufficient quantities to meet domestic demand” as well as “certain critical minerals, metals used in currency and bullion, energy and energy products.”

Among other specific goods, pharmaceuticals and electronics, it will also not apply to “passenger vehicles, certain light trucks, certain medium and heavy-duty vehicles, buses, and certain parts of passenger vehicles, light trucks, heavy-duty vehicles and buses.”

Trump on Friday separately announced the continued suspension, first imposed on Feb. 1 last year, of duty-free de minimis treatment for low-value shipments, including goods shipped through the international postal system. Those goods will also be subject to the new 10 per cent tariff.

In a separate social media post Saturday (Feb. 21), Trump said he would instead set his new Section 122 tariff “effective immediately” at “the fully allowed, and legally tested, 15 per cent level,” but as of Sunday (Feb. 22) had not yet issued a new or updated proclamation or executive order to that effect.

Canadian groups react

Canadian Federation of Agriculture president Keith Currie told Glacier FarmMedia in a text that he hoped the Supreme Court’s decision would bring back some stability to cross-border trade. However, he noted that we’d have to wait and see what other tools the Trump administration utilizes.

“Obviously this court decision supports what we’ve been saying about the tariffs not being justified,” Currie said.

“Today’s Supreme Court ruling that the IEEPA tariffs are unlawful is welcome news for equipment manufacturers, which have spent the last year navigating higher input costs and mounting trade uncertainty,” said Kip Eideberg, senior vice-president of industry and government relations for the Association of Equipment Manufacturers, in a statement.

“What equipment manufacturers need most is certainty so they can make long-term decisions that benefit their workers, their customers, and the broader economy.”

Following Trump’s vow to impose other tariffs, the Association of Equipment Manufacturers reiterated equipment manufacturers’ need for certainty while making longterm decisions.

The justices, in a 6-3 ruling authored by conservative Chief Justice John Roberts, upheld a lower court’s decision that the Republican president’s use of this 1977 law exceeded his authority.

Trump says he’s “ashamed” of SCOTUS members

Trump, in comments at the White House, condemned the ruling as “terrible” and lashed out at the six justices who ruled against him.

“I’m ashamed of certain members of the court – absolutely ashamed – for not having the courage to do what’s right for our country,” Trump said.

Trump has leveraged tariffs – taxes on imported goods – as a key economic and foreign policy tool.

“Our task today is to decide only whether the power to “regulate … importation,” as granted to the president in IEEPA, embraces the power to impose tariffs. It does not,” Roberts wrote in the ruling, quoting the statute’s text that Trump claimed had justified his sweeping tariffs.

The U.S. Constitution grants Congress, not the president, the authority to issue taxes and tariffs.

Tariffs have been central to a global trade war that Trump initiated after he began his second term as president, one that has alienated trading partners, affected financial markets and caused global economic uncertainty.

Trump has called his tariffs vital for U.S. economic security, predicting that the country would be defenseless and ruined without them.

“Foreign countries that have been ripping us off for years are ecstatic,” Trump said on Friday. “They’re so happy, and they’re dancing in the streets, but they won’t be dancing for long that, I can assure you.”

The Supreme Court, which has a 6-3 conservative majority, had allowed Trump’s expansive exertion of presidential powers in other areas in a series of rulings issued on an emergency basis, and Friday’s ruling represented the biggest setback it has dealt him since he returned to office in January 2025.

“It’s my opinion that the court has been swayed by foreign interests and a political movement that is far smaller than people would ever think,” Trump said.

“He cannot”

Roberts, citing a prior Supreme Court ruling, wrote that “the president must ‘point to clear congressional authorization’ to justify his extraordinary assertion of the power to impose tariffs,” adding: “He cannot.”

Trump has leveraged tariffs – taxes on imported goods – as a key economic and foreign policy tool. They have been central to a global trade war that Trump initiated after he began his second term as president, one that has alienated trading partners, affected financial markets and caused global economic uncertainty.

The Supreme Court reached its conclusion in a legal challenge by businesses affected by the tariffs and 12 U.S. states, most of them Democratic-governed, against Trump’s unprecedented use of this law to unilaterally impose the import taxes.

Trump’s tariffs were forecast to generate over the next decade trillions of dollars in revenue for the United States, which possesses the world’s largest economy.

Tariffs will likely need to be refunded

Trump’s administration has not provided tariffs collection data since December 14. But Penn-Wharton Budget Model economists estimated on Friday that the amount collected in Trump’s tariffs based on the International Emergency Economic Powers Act stood at more than $175 billion (C$239.4 billion). And that amount likely would need to be refunded with a Supreme Court ruling against the IEEPA-based tariffs.

The U.S. Constitution grants Congress, not the president, the authority to issue taxes and tariffs. But Trump instead turned to a statutory authority by invoking IEEPA to impose the tariffs on nearly every U.S. trading partner without the approval of Congress. Trump has imposed some additional tariffs under other laws that are not at issue in this case. Based on government data from October to mid-December, those represent about third of the revenue from Trump-imposed tariffs.

IEEPA lets a president regulate commerce in a national emergency. Trump became the first president to use IEEPA to impose tariffs, one of the many ways he has aggressively pushed the boundaries of executive authority since he returned to office in areas as varied as his crackdown on immigration, the firing of federal agency officials, domestic military deployments and military operations overseas.

Trump described the tariffs as vital for U.S. economic security, predicting that the country would be defenseless and ruined without them. Trump in November told reporters that without his tariffs “the rest of the world would laugh at us because they’ve used tariffs against us for years and took advantage of us.” Trump said the United States was abused by other countries including China, the second-largest economy.

U.S. could invoke other legal justifications: Bessent

After the Supreme Court heard arguments in the case in November, Trump said he would consider alternatives if it ruled against him on tariffs, telling reporters that “we’ll have to develop a ‘game two’ plan.”

Treasury Secretary Scott Bessent and other administration officials said the United States would invoke other legal justifications to retain as many of Trump’s tariffs as possible. Among others, these include a statutory provision that permits tariffs on imported goods that threaten U.S. national security and another that allows retaliatory actions including tariffs against trading partners that the Office of the U.S. Trade Representative determines have used unfair trade practices against American exporters.

None of these alternatives offered the flexibility and blunt-force dynamics that IEEPA provided Trump, and may not be able to replicate the full scope of his tariffs in a timely fashion.

Trump’s ability to impose tariffs instantaneously on any trading partner’s goods under the aegis of some form of declared national emergency raised his leverage over other countries. It brought world leaders scrambling to Washington to secure trade deals that often included pledges of billions of dollars in investments or other offers of enhanced market access for U.S. companies.

But Trump’s use of tariffs as a cudgel in U.S. foreign policy has succeeded in antagonizing numerous countries, including those long considered among the closest U.S. allies.

IEEPA historically had been used for imposing sanctions on enemies or freezing their assets, not to impose tariffs. The law does not specifically mention the word tariffs. Trump’s Justice Department had argued that IEEPA allows tariffs by authorizing the president to “regulate” imports to address emergencies.

Tariffs generated $195 billion

The Congressional Budget Office has estimated that if all current tariffs stay in place, including the IEEPA-based duties, they would generate about $300 billion annually over the next decade.

Total U.S. net customs duty receipts reached a record $195 billion (C$266.8 billion) in fiscal 2025, which ended on September 30, according to U.S. Treasury Department data.

On April 2 on a date Trump labeled “Liberation Day,” the president announced what he called “reciprocal” tariffs on goods imported from most U.S. trading partners, invoking IEEPA to address what he called a national emergency related to U.S. trade deficits, though the United States already had run trade deficits for decades.

In February and March of 2025, Trump invoked IEEPA to impose tariffs on China, Canada and Mexico, citing the trafficking of the often-abused painkiller fentanyl and illicit drugs into the United States as a national emergency.

Trump has wielded his tariffs to extract concessions and renegotiate trade deals, and as a weapon to punish countries that draw his ire on non-trade political matters. These have ranged from Brazil’s prosecution of former president Jair Bolsonaro, India’s purchases of Russian oil that help fund Russia’s war in Ukraine, and an anti-tariffs ad by Canada’s Ontario province.

IEEPA was passed by Congress and signed by Democratic President Jimmy Carter. In passing the measure, Congress placed additional limits on the president’s authority compared to a predecessor law.

The cases on tariffs before the justices involved three lawsuits.

The Washington-based U.S. Court of Appeals for the Federal Circuit sided with five small businesses that import goods in one challenge, and the states of Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, Oregon and Vermont in another.

Separately, a Washington-based federal judge sided with a family-owned toy company called Learning Resources.

— Additional reporting by David Lawder and John Kruzel. With files from Jonah Grignon and Geralyn Wichers.

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Charette will act as a senior advisor to the Prime Minister and to Dominic LeBlanc, the minister responsible for Canada-U.S. trade on the upcoming review of the Canada-United States-Mexico Agreement, a statement from the prime minister’s office said.

WHY IT MATTERS: CUSMA facilitates the largely free trade between the U.S. and Canada, however U.S. President Donald Trump has not guaranteed it will be renewed.

Canada sends about 70 per cent of its exports to the United States. CUSMA, also known as the United States-Mexico-Canada Agreement, is a continental trade pact that has shielded much of Canada’s exports from U.S. tariffs. It is up for joint review by a July 1 deadline.

“With four decades of experience in public policy and diplomacy, Janice Charette brings extraordinary leadership, expertise, and a deep commitment to advancing Canada’s interests,” Carney said.

“As Chief Trade Negotiator, she will advance Canadian interests and a strengthened trade and investment relationship that benefits workers and industries in both Canada and the United States.”

Charette has twice served as clerk of the Privy Council and secretary to the Cabinet, according to the statement. The clerk of the Privy Council is the head of the civil service in Canada.

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The Americans’ real anger is that they didn’t negotiate well regarding tariff rate quotas (TRQs) for new access to the Canadian dairy market during the Canada-U.S.-Mexico Agreement (CUSMA), said Andrea van Vugt, with Wellington Advisory, which advises Dairy Farmers of Ontario.

That means there’s likely room to negotiate on dairy with the U.S.

WHY IT MATTERS: The loss of supply management would have a significant impact on rural communities, particularly in Ontario and Quebec.

“I think the easy win is on TRQ administration,” said Stephen de Boer, who is on Wellington Advisory’s strategic advisory board and was previously part of the federal government advising on areas like defence. He also served as an ambassador, including to the World Trade Organization.

De Boer and van Vugt were part of a discussion at the Dairy Farmers of Ontario’s 2026 annual meeting in Toronto, held Jan. 13-15.

There’s a route to allowing the Americans a new way to administer TRQs, “and call it a day”, said de Boer.

When Canada negotiated its most recent trade agreements, including CUSMA and the Comprehensive Progressive Trans Pacific Partnership (CPTPP), it did not spell out how we would administer the TRQs, and that allowed Canada to give the TRQs to Canadian processors, not directly to retailers.

New Zealand also didn’t like that this method of TRQ allocation was the same in the CPTPP.

“It’s not what they expected, but it is what we negotiated,” said de Boer.

Van Vugt and de Boer also agreed that the negotiations would likely mean more access to the Canadian market for American products.

However, there doesn’t appear to be a lot of appetite for eliminating supply management for poultry and dairy.

“When I’ve talked to U.S. officials, and when I say U.S. officials, I mean certain U.S. officials who may live in Canada, representing U.S. interests in Canada,” they are concerned about the U.S. dairy sector facing competition from Canadian farmers, because they know that will happen, said van Vugt.

That doesn’t mean that Trump couldn’t make a larger, unexpected request, she said, as that’s in character for Trump, and he has prioritized dairy as an irritant.

De Boer said the Americans also understand that they use some supply management techniques to manage dairy production, too.

He added he expects chicken negotiations not to be arduous. “Our negotiators are excellent, particularly in negotiating in this space.”

Why the CUSMA review is toothless

The inclusion of a review clause in the CUSMA agreement was a step up from the previous North American Free Trade Agreement (NAFTA) because there was no such clause.

However, the clause has little power, said van Vugt.

“The review clause really is just, we’re going to get together, we’re going to talk if we disagree about things, we’re going to get together again in a few years and talk again. That’s it,” she said.

The review clause has become the “pointy end of a stick” that Trump is using, said de Boer, and it could lead to greater pressure tactics like the Americans threatening to leave the agreement.

He said he expects at minimum that CUSMA countries will be into yearly reviews, until renegotiation.

Trump operates by trying to gain leverage in anything he does, so it makes sense he will try the same game around CUSMA.

“I understand why he’s doing it, but I don’t think he has as much leverage as he thinks he has,” said de Boer, adding that Trump could take many actions, including adding new tariffs or blocking the border to access to some Canadian products.

Negotiators still to be determined

Van Vugt and de Boer both expressed their dismay that Kirsten Hillman, Canada’s ambassador to the United States and a skilled trade negotiator, has resigned her role. New negotiators in the federal government are being vetted and should be revealed soon. Van Vugt said it won’t be the new ambassador to the U.S. Mark Wiseman. Ambassadors usually don’t negotiate trade deals.

Van Vugt called Hillman “an incredible representative of Canada” and “an incredible advocate with incredible knowledge of the supply management industry.”

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The Bank of Canada recently called the Canadian economy resilient in the face of trade woes and kept its key policy rate steady at 2.25 per cent. It noted that third quarter annualized GDP grew by 2.6 per cent, much more than expected.

However, a recent FCC report predicts Canada’s economy decelerating due to factors like interest rates, ongoing trade uncertainty and voluntary country of origin labelling (vCOOL).

“The message there was basically that maybe there’s a little bit of complacency in the markets,” said Krishen Rangasamy, FCC’s principal economist and the report’s author.

Interest rates

He said there is a chance interest rates will go down next year. This is likely to affect farmers, who are heavy borrowers. The report cites several complications for residential construction, which accounts for about eight per cent of Canada’s economy.

“Even though the Bank of Canada, in our view, should probably lower rates next year … long rates are probably not going to change a whole lot from here.”

Rangasamy said this is related to Canada’s bonds being closely linked to U.S. treasuries.

“’Oh, the Bank of Canada is lowering rates. Why isn’t my mortgage rate falling? I’m about to renew, and it’s still high.’ Well, then that’s the answer, right? So, you’re borrowing at the long end of a yield curve, not at the short end.”

The five-year bond rate is at three per cent. Five years ago in 2021, it was one per cent.

“Which tells you if you originated five years ago in 2021 and you’re going to renew in 2026 what’s going to happen? You’re going to renew at a higher rate, a way higher rate than what you originated at,” said Rangasamy.

“Whoever is going to renew next year a fixed rate product at the longer end of a yield curve, it’s going to be painful.”

Business confidence decreasing

Investment intentions over the next year are also predicted to drop, as the report shows business confidence decreasing in Canada.

The cloud that is uncertainty with the U.S. is expected to continue to cause problems.

“At the moment it looks like it’s going to stay there for 2026,” Rangasamy said.

The report predicts that “as the impact of the AI investment boom fades, cracks formed by the White House’s policies on tariffs and immigration will become more visible stateside.”

This could lead to a drop in demand for exported Canadian goods, 70 per cent of which are purchased by the U.S.

“Any drop in U.S. demand will have repercussions on this side of the border,” the report states.

One factor could help ease trade tensions: negotiations on the Canada-United States-Mexico Agreement (CUSMA) are set to begin next summer. Rangasamy said it is possible, even likely CUSMA will be renewed. Until anything is certain, the cloud will linger.

“That’s one of the reasons we’re not that optimistic about the rebound of business investment in Canada,” he said. “One thing businesses don’t like is uncertainty, and that U.S. trade policy is certainly wreaking havoc in that regard.”

Country of origin labelling

Another potentially aggravating factor is voluntary country of origin labelling (vCOOL) rules in the U.S., set to come into effect Jan. 1.

Canadian commodity groups say the vCOOL ruling could limit their access to American markets.

“There’s anecdotal evidence and some newspaper clippings that some farmers are already seeing a drop in demand from the U.S. ahead of that vCOOL being implemented,” said Rangasamy.

He said previous similar regulations harmed Canadian agriculture, particularly the hog sector.

Mandatory country of origin labelling (mCOOL) “went away in 2015, and we recovered a little bit, but we never went back to pre-mCOOL (mandatory country of origin labeling) levels,” he said.

“If you look at history, there’s a precedent where U.S policy basically causes permanent damage, even if it was it was removed afterwards,” he said. “If you take this as a guide, well, that’s not a great sign.”

Weathering the storm

Though FCC’s forecast may look dire, Rangasamy said it is “not all doom and gloom” and offered some suggestions for producers in the year ahead.

The first piece of advice is to boost productivity as much as possible.

“Make sure you’re lean, because … you’ll be in a better position to weather the storm,” he said. “You can’t control the external forces. What you can do is control your operation. So stay lean, seek productivity improvements wherever you can.”

Knowing costs of production is also crucial, as it can help producers take advantage of market movements. Rangasamy used the recent volatility of canola prices as an example:

“Markets sort of overreacted for two, three months,” he said. “Let’s say you’re a canola producer, so you know what your cost of production is, and as soon as you see prices go up and up towards a certain level, you say, ‘hey, I can lock this in.’”

“All this is a good thing, but also very important is to know your cost of production, to take advantage of volatility, because there’s always volatility in commodity markets, but more so with trade policy.”

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Why it matters: Free trade is critical for Canadian farmers, as much of what they produce is exported.

“We feel the current agreement is a good one and we’d like to see it continue as is,” said Keith Currie, Canadian Federation of Agriculture president, adding the request includes signing it for the original 16-year completion date without weakening its provisions or introducing any changes that negatively affect the agricultural sector.

“It’s really important to make the job of governments harder to ignore us when we are together as an industry.”

Signed by 98 Canadian food and agricultural value chain organizations, the letter mirrors one signed and submitted to Congress by 124 United States food and agricultural value chain organizations in October for the 2026 Joint Review of CUSMA public consultation, placing pressure on both governments to respect the agriculture industry’s support for the agreement.

Highlighting CUSMA’s instrumental role in building a stable, integrated and thriving North American agricultural market, the letter highlighted specific areas Canadian farmers, ranchers and processors would like to remain untouched.

“We are calling on governments to maintain the agreement’s SPS (sanitary and phytosanitary) provisions, which have improved transparency and ensured science-based treatment of agricultural products—protecting plant and animal health,” the letter states. “The continuation of science-based regulatory cooperation is critical to ensuring timely access to agricultural innovations.”

It also reflects full support for the Chapter 31 dispute settlement provisions designed to resolve “barriers that otherwise disrupt market stability and growth.”

Political and geopolitical events of the last decade are shifting the narrative, making it necessary for Canada’s 260-plus commodities, along with Mexico and the U.S. agricultural sectors, to support one another, Currie explained.

The letter said that between 2005 and 2023, CUSMA tripled the value of North American agriculture and agrifood trade to the tune of approximately C$400 billion (US$285 billion).

Currie said the three countries are aligned through a shared language, goals and collaborative relationship-building to strengthen and improve the sector.

“We all need each other’s help, and we can’t get this across the finish line unless we’re all pushing in the same direction,” he explained, adding all three countries are aligned through a shared language, goals, and collaborative relationship-building to strengthen and improve the sector.

“When the deal is all done, I would certainly be happy with an advantage for our farmers, but I don’t want to see it come at the detriment of either my colleagues, my farmer friends in the U.S., or relationships between nations.”

Currie said consumers now have a better understanding of agriculture and the agri-food industry’s role in driving Canada’s economy forward, gaining a clearer perspective on what food security means to them.

A recent Nanos poll asking Canadians to rank the government’s top two priorities for countering U.S. tariffs found that agriculture ranked first with 29 per cent, and 19 per cent ranked it as a secondary priority.

Automotive was second, with primary and secondary priority ratings of 24 and 18 per cent, respectively.

Provincially, Prairie provinces showed 42 per cent agricultural support. In comparison, automotive garnered 18 per cent, while others saw agriculture gain 26 to 28 per cent as the primary priority and automotive from 14 to 24 per cent.

Ontario was an outlier, ranking automotive as the primary with 35 per cent and agriculture at 24 per cent. Softwood lumber was the top concern in British Columbia, with 35 per cent, and second in Atlantic Canada at 24 per cent.

“(Consumers) want to make sure the government understands that they recognize agriculture is important,” explained Currie. “That helps us now go to the government and say, ‘Look, this is in the national interest. Food security is important. Economic security is also important, and agriculture wants to be part of the team.”

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