Washington points to unresolved issues with Canada
The United States’ top trade official has signalled that a key deadline in the review of the Canada-United States-Mexico Agreement (CUSMA) may pass without a resolution, raising fresh questions about the future of a deal that has anchored North American trade for more than three decades.
US Trade Representative Jamieson Greer said the Trump administration would try to resolve as many outstanding issues as possible before July 1, but that negotiations were likely to continue past that date.
“I think that we aren’t probably going to be able to resolve all issues by July 1, but I think we are on track to resolve many of them and to move as quickly as we can,” Greer said during a fireside chat at the Hudson Institute earlier this week.
The July 2026 milestone marks a mandatory joint review, when parties decide whether to extend the deal for another 16 years or shift to annual reviews that could add uncertainty for businesses.
Greer said talks with Mexico had advanced, while issues with Canada remained. “We’ve worked really closely with the Mexicans over the past year,” he said. “They’ve resolved a lot of issues. The Canadians – we have some issues with them that haven’t been resolved yet.”
Negotiations between Canada and the US resumed in early March after a months-long pause. Trade minister Dominic LeBlanc said discussions remain constructive. “We continue to work very constructively with our American counterparts,” he said.
Digital sovereignty in focus
The US Trade Representative’s office has added Canada’s Sovereign Cloud Initiative to its list of trade irritants, alongside laws governing online platforms – issues likely to feature prominently in the review.
The office pointed to a 2025 request for information from Shared Services Canada on building a fully sovereign public cloud system.
Industry minister Mélanie Joly defended the approach. “Protecting your sovereignty, including in the digital sector – this is our country,” she said. “We’ll continue to defend it, and we’ll continue to build it.”
Washington has also raised concerns about Canada’s Online Streaming Act and Online News Act, citing their impact on US digital firms.
Critics warn Ottawa could scale back its position, noting its decision to pause a digital services tax after US pressure. Andrew Clement, chair of Canadians for Digital Sovereignty, told Global News that the motivation behind US actions is clear. “It’s clear that the US government is working closely with the big tech companies to promote their interests, which are not the interests of Canadians,” he said.
Structure under scrutiny
Beyond policy disputes, the structure of the agreement is also being questioned. Greer has suggested separate protocols for Canada and Mexico, layered over what he called the “load-bearing pillars” of the deal, Bloomberg noted.
“Our import-export profile is different with each country,” he said. “The labour situation in each country is different… So, it necessitates two separate protocols.”
The idea echoes earlier negotiations, when Canada risked being sidelined after a preliminary US-Mexico agreement.
LeBlanc rejected that framing, saying Canada and Mexico remain “absolutely committed to the trilateral free trade agreement.”
Economic stakes
The Bank of Canada expects CUSMA will be extended with limited changes, but warns that a breakdown could weaken exports, reduce investment and hiring, and push prices higher.
Stakeholders consulted by the federal government have broadly backed a “do no harm” approach, emphasizing the need to preserve tariff-free access.
In 2024, North American trade totalled about $1.93 trillion, with Canada and Mexico the United States’ top trading partners.
If no agreement is reached, the pact would move to annual reviews until extended or until it expires in 2036 – a scenario the Bank of Canada says would prolong uncertainty for exporters and supply chains.
