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A Tariff Exemption Was Canada’s Salvation in 2025. It’s 'Absolutely' at Risk in 2026

On Dec. 22, 2025, Canada’s CUSMA exemption and Ottawa ending most counter-tariffs pulled the economy out of quicksand, averting a forecast sharp recession this year.
Under the agreement, CUSMA compliance lets exporters prove products were substantially made in Canada to claim duty-free entry, bypassing 35 per cent blanket tariffs that apply only to Canadian goods.
Data show 90 per cent of Canadian goods entered the U.S. tariff-free as of July, while the Bank of Canada pegs the effective tariff rate at 5.9 per cent.
Experts warn the CUSMA 2026 review is at risk, with officials preparing for possible removal of carve-outs, risking long-term damage to Canada’s economy, according to analysts.
Looking to next year, officials expect the 2026 CUSMA review to determine tariff permanence, with William Pellerin warning permanent tariffs are "possible if not likely" and Oxford Economics projecting ongoing lower U.S. tariffs on steel, aluminum, and agriculture.

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US-Mexico-Canada trade talks to begin in January

Mexico, Canada and the United States will commence formal discussions to review the United States-Mexico-Canada (USMCA) free trade agreement in mid-January, Canadian Prime Minister Mark Carney’s office reported on Thursday. Carney met with the leaders of Canada’s provinces on Thursday to provide an update on the trade talks. Canada-U.S. Trade Minister Dominic LeBlanc “will meet with U.S. counterparts in mid-January to launch formal discussions…

2 days ago·Mexico

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