Trump Says CUSMA Benefits All, But Keeps Termination Option Open

Henrik Larsen

4 min read

Post on May 08, 2025

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Claimed Benefits of CUSMA Under Trump's Administration

Trump's administration frequently touted the supposed economic benefits of CUSMA, painting a picture of enhanced prosperity for all three participating nations. These claims, however, often lacked detailed substantiation and faced criticism from various economic analysts.

• Increased Economic Growth: The administration claimed CUSMA would stimulate significant economic growth in the US, Mexico, and Canada. While some economists predicted positive, albeit modest, growth, concrete numbers supporting Trump's assertions remained elusive. Specific projections were often overshadowed by broader global economic factors.

• Job Creation: A key promise was the creation of numerous jobs, particularly in the manufacturing and agricultural sectors. The administration pointed to specific examples, but the actual net job creation attributable solely to CUSMA remains a subject of debate. Critics argued that automation and other factors played a larger role in employment trends.

• Improved Market Access: CUSMA was presented as opening up new markets for US businesses in Canada and Mexico. While some industries certainly benefited from streamlined trade, the overall impact was arguably less transformative than initially portrayed. Specific examples often highlighted existing trade relationships rather than entirely new market access.

• Strengthened Supply Chains: The agreement aimed to strengthen regional supply chains and foster greater integration. While this aspect did improve logistics for some companies, the overall impact on trade flows was less dramatic than some predictions suggested.

Counterarguments: Many independent analyses pointed out that CUSMA's benefits were often incremental rather than revolutionary. Concerns were raised about the impact on specific industries and the overall distribution of gains among different economic actors. The lack of readily available, concrete data supporting the administration's most ambitious claims fueled skepticism.

The Threat of CUSMA Termination: Political and Economic Ramifications

Throughout his presidency, Trump frequently wielded the threat of CUSMA termination as a negotiating tactic, creating considerable uncertainty. This strategy stemmed from various factors:

• Trade Negotiation Leverage: The threat served as leverage in bilateral trade negotiations with Canada and Mexico. By suggesting withdrawal, the administration aimed to secure more favorable terms on specific issues.

• Political Signaling: The constant threat also served as a powerful political signal, demonstrating a willingness to challenge established trade relationships and prioritize "America First" principles.

• Domestic Political Appeal: The rhetoric around CUSMA termination resonated with parts of Trump's political base that viewed existing trade agreements as detrimental to American interests.

The potential consequences of CUSMA termination were severe:

• Economic Disruptions: Businesses reliant on CUSMA trade faced potential disruptions to supply chains and increased costs.

• Retaliatory Measures: Canada and Mexico could have imposed retaliatory tariffs, escalating the trade conflict and further damaging the US economy.

• Consumer Costs: Consumers would likely have faced higher prices for imported goods.

• Geopolitical Fallout: The termination would severely strain US relations with its closest neighbors, potentially undermining regional stability.

Analysis of Trump's CUSMA Strategy: A Balancing Act?

Trump's approach to CUSMA can be seen as a calculated risk—a high-stakes game of brinkmanship designed to maximize US leverage. While the constant threat of termination created significant uncertainty, it arguably achieved some of its intended goals, securing concessions on specific issues. However, its long-term effectiveness is debatable, given the potential damage to trade relationships and economic stability. Alternative approaches, emphasizing collaboration and mutual benefit, might have yielded more sustainable results.

The Future of CUSMA Under the Biden Administration

The Biden administration inherited a CUSMA agreement largely intact, although the threat of termination receded significantly. Biden's approach to trade focuses on greater multilateralism and repairing strained international relationships. While the Biden administration has made some tweaks and focused on addressing labor and environmental concerns within the framework of CUSMA, the fundamental structure of the agreement largely remains the same. The aggressive, almost confrontational trade policy of the previous administration has given way to a more conciliatory tone.

Conclusion: The Uncertain Future of CUSMA and the Legacy of Trump's Trade Policy

Trump's legacy on CUSMA is a mixed bag. While he claimed significant benefits, the actual gains remain debatable, and the constant threat of termination created significant economic and political uncertainty. The agreement's long-term future, although considerably more stable under the Biden administration, still depends on ongoing geopolitical factors and the commitment of all three participating nations. To understand the full impact of CUSMA, it's crucial to stay updated on the latest developments and engage in informed discussions about its effects on the US and global economies. Learn more about USMCA benefits and risks and follow the future of the CUSMA agreement to stay informed.