U.S. President Donald Trump reacts during a signing ceremony on his Board of Peace initiative at the Annual Meeting of the World Economic Forum in Davos, Switzerland, Thursday, Jan. 22, 2026. (AP Photo/Markus Schreiber) · Associated Press
It’s been 49 days since BoC Governor Tiff Macklem said trade tension with the United States “is more than a cyclical downturn, it’s a structural transition.”
A lot has happened since then.
With tensions rising, and the Canada-United States-Mexico Agreement (CUSMA) trade deal due for joint review in the coming months, here are four expert takes on how things could play out.
“We think we’ll still have pretty good access to the U.S. market without tariffs,” Deloitte Canada chief economist Dawn Desjardins told Yahoo Finance Canada earlier this month. “We’ve really assumed a bit of a status quo.”
BMO senior economist Sal Guatieri has a similar view.
“Our critical assumption for 2026 is that the [CUSMA] review will extend beyond this year, keeping the U.S. in the agreement, and preserving the compliance exemption on most Canadian goods,” he wrote in a research report. “We assume the status quo in 2026, albeit with the odd flare-up in tensions.”
Oxford Economics predicts most U.S. tariffs on Canada will be removed by the third quarter of 2026 as CUSMA is renegotiated.
“We anticipate 10 per cent targeted U.S. tariffs will remain for steel and aluminum products, protectionist levies that weren’t in place prior to U.S. President Donald Trump’s second term,” the economic advisory firm wrote in a report published on Jan. 14. “This means the prevailing 6.3 per cent U.S. effective tariff rate on Canadian goods will drop to around one per cent, and kick off a recovery in trade that helps support stronger economic growth.”
Meanwhile, RBC chief economist Frances Donald warns against a short-sighted focus on the negotiations.
“Recall that CUSMA includes a separate option (not tied to scheduled renegotiations) for any country to opt out of the agreement with six months’ notice,” she wrote in a recent report.
“Trade uncertainty will persist over the course of 2026, but our focus will be on the long legs of this transitional moment, and perhaps a bit less on the headlines around the CUSMA extension itself.”