It's been a while since I posted about US tariffs and the USMCA negotiations. It doesn't seem much like news any more. But as the US and Canada ramp up negotiations ahead of the August 19th deadline (tomorrow!) for a new round of Trumk tariffs, it's starting to become more real.
It was timely, then, to read an article about how even the end of USMCA - often portrayed as an existential threat to Canada - actually night not be as impactful as most people assume. Yes, it would be bad, bad, not good for the economy, generally speaking, but terminal danger? - probably not.
There have been several studies and modelling exercises over the past couple of years on the likely impact of Donald Trump tearing up the USMCA agreement he signed off on six years ago, almost all of which conclude that, while unfortunate for both countries, it would not be catastrophic for Canada.
The latest such comes from the Canadian American Business Council, and it concludes that "USMCA Breakdown" would probably reduce Canada's economic growth rate by just 1% in 2027, and the economy would be about 1.6% smaller in 2035 than.if USMCA were renewed (and respected) and tariffs fell to near zero.
Furthermore, it would result in about 102,000 lost jobs. While this sounds pretty bad initially, bear in mnd that Canada currently has 21.2 million citizens in paid employment. The 102,000 lost jobs would have the effect of increasing the unemployment rate from 6.4% to 6.9% (which is where it was four months ago (it was at or above 6.9% for most of 2025).
So, not so bad then. The country will not be bankrupt. Not so good for those 102,000 workers, of course, and bear in mind that the axe will not fall randomly - some sectors in particular will be disproportionately affected. But all this means that Prime Minister Mark Carmey does not have to accept any old deal Trump threats at him; a bad deal could be worse than no deal
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