The Canada-US trade relationship has long operated on good faith. Donald Trump ended that

When the Mulroney government was negotiating the original FTA with the Americans in the 1980s — following recommendations by the Macdonald Commission — it was seen as important to finally have a legal framework that would be mutually beneficial by maintaining open markets, fixed duty rates and non-discriminatory treatment of imported goods and services. The final agreement followed the underpinnings of the 1947 General Agreement on Tariffs and Trade (GATT), rules that were later incorporated into the 1994 NAFTA and, after U.S. President Donald Trump arrived on the scene, into the 2020 USMCA. 

Canada’s leap of faith was vindicated, as the North American economy flourished over the decades. But that faith was based on the premise that a deal with the Americans was a deal, that Canada could count on the U.S. as a reliable treaty partner. We now see that premise no longer holds.

Trump’s latest order to apply 50 per cent duties on billions of dollars of Canadian imports was bad enough, but his earlier duties on Canadian autos, steel and aluminum back in February 2025 ended confidence in the value of the U.S. signature. Without prior notice or consultation, those actions violated one of the sacred principles of international law — that treaties are to be complied with “in good faith.”

Remember, we’re talking about a ratified treaty that was approved by the U.S. Congress, with its preamble that affirms the common objectives of creating “a high standard new agreement to support mutually beneficial trade leading to freer, fairer markets, and to robust economic growth in the region” with “a clear, transparent, and predictable legal and commercial framework for business planning, that supports further expansion of trade and investment.”

Even after signing off on the USMCA, without warning Trump hit Canada a few years later with unwarranted duties, saying “We don’t need their cars, we don’t need their lumber, we don’t need their energy. We don’t need anything from Canada.” This coming from a free-trade partner regarding a recently concluded agreement.

The current trade war has probably damaged the USMCA beyond repair. While it remains nominally in force, its centrepiece and core rationale — duty free trade — is gone. And with that, the deal’s very purpose disappears.

There are other parts that are not really operative either. For starters, you can kiss goodbye to the dispute settlement provisions allowing governments to sue one another for failure to comply with treaty obligations. The Trump administration would never agree to be dragged before any kind of adjudication panel. It’s also hard to see the mechanism for appeals to independent panels from anti-dumping and countervailing duties have any practical life either.

And then there’s the myriad of trilateral committees, working groups and other subsidiary bodies under the Agreement, working on co-operative arrangements in all sorts of areas. With Canada-U. S. trade in tatters, it’s unlikely that much will come of these efforts.

Overhanging all this is the separate USMCA review process (or renegotiation) that was supposed to start this summer. Given that Canada and the U.S. are into an acrimonious trade war, it’s difficult to see how the two sides can engage in this review exercise, even if one assumes the Agreement still has some life — as doubtful as that may be.

So in light of facts on the ground, what’s really left of the USMCA? Not much, would be the best answer. Taking the world as it is — as the prime minister said in his Davos speech last January — the ideals behind Canada’s leap of faith in the 1980s have been shattered., We’re in a situation where North American free trade is over, where the objectives in the USMCA preamble ring hollow. Some of the structure remains — but the contents have been emptied. Canada has to move ahead with other strategies, as the prime minister has said.