One question for the United States will be how CUSMA can help reduce its trade imbalances, especially in manufactured end products with the rest of the world. While the US has a substantial deficit with Mexico in that category, somewhat offset by net exports of energy and industrial materials, the US registers a surplus with Canada. This surplus, however, is put at risk by rising trade barriers between the two countries, which tend to weaken Canada’s market for US-manufactured goods. The US does have a significant energy deficit with Canada, which in part allows the them to generate its large energy trade surplus with other countries. The global picture, as much as the trilateral one, will inform each country’s position in the negotiations ahead of and following the formal July 1 review.
For more on how these factors should inform Canada’s approach to CUSMA talks, see this publication.
Source: United States Census Bureau, and C.D. Howe Institute calculations
