Who's Really Threatening CUSMA?

Is Canada really the problem in CUSMA trade tensions? This article unpacks the flawed narrative and shows how U.S. tariffs and unilateral actions are the real threat to the agreement.
CUSMA TradePolicy CanadaUSRelations InternationalTrade
EconomicSovereignty

 The idea that Canada's reaction to American tariffs is the primary threat to the CUSMA agreement is a narrative that largely serves a specific political purpose. It downplays the initial, unilateral actions of the U.S. and shifts the blame for the ensuing trade tensions onto the country that was simply responding.

Here's why that "framing" of the problem is so problematic and why many observers, including those in Canada, see it as a " a total stretch”

  1. The Cause and Effect: The sequence of events is clear: The Trump administration imposed tariffs on Canadian steel and aluminum, citing a dubious "national security" justification. This action was widely criticized by trade experts and allies, not just Canada, and a direct violation of the spirit of the CUSMA agreement. Canada's response was a predictable and standard retaliatory measure, a tool used in international trade to pressure a country to reverse its protectionist policies. To suggest that the response is the threat, rather than the initial action, is to ignore the fundamental cause and effect.

2. International Law and Disputes: The CUSMA agreement, and international trade law in general, is built on the principle of resolving disputes through established mechanisms. When the U.S. imposed tariffs, Canada didn't just escalate the conflict; it also utilized CUSMA's dispute settlement mechanisms to challenge the U.S. actions. Canada has won several of these disputes, including a recent one regarding solar tariffs and another over dairy quotas. This demonstrates that Canada is operating within the "rules-based" framework of the agreement, while the U.S. is the one acting unilaterally and often in defiance of the deal it helped create.

3. The Goal of the U.S. Tariffs: The initial U.S. tariffs were not about protecting CUSMA; they were about advancing a "America First" protectionist agenda. We do note that this was a broader policy stance, not limited to CUSMA

However, the rhetoric from the Trump administration, both during the CUSMA negotiations and afterwards, consistently characterized the trade relationship as a zero-sum game where the U.S. was being "taken advantage of." Canada's refusal to concede to these demands and its decision to push back with its own tariffs is simply a defense of its own economic sovereignty and the principles of fair trade.

4. The "Uncertainty" Argument: A common talking point from the U.S. is that Canada's actions are creating "uncertainty" for businesses. However, the greater uncertainty is created by the U.S.'s willingness to impose tariffs at will, to ignore dispute panel rulings, and to threaten to reopen or even scrap the entire agreement. Canada's response, while disruptive, is predictable and meant to restore a sense of balance to the relationship.

In essence, the argument that Canada is "threatening" CUSMA is a deflection.

It's a way for the U.S. to avoid accountability for its own protectionist policies and to pressure Canada into making concessions. For any observer using common sense, it is clear that the instability in the CUSMA relationship originated with the actions of the U.S. and that Canada's response is a necessary defense of its economic interests.

SP

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