Canada Could Lose 100,000 Jobs as U.S. Risks 200,000 if CUSMA Collapses – Report

Date: August 11, 2026
By: Ebenezer Adugyamfi/ Emmanuel Ayiku for GhanaianNewsCanada

Canada and the United States could both face significant employment losses if the Canada-United States-Mexico Agreement (CUSMA) collapses, according to a new report warning that the economic consequences could be considerably larger for the two countries than many businesses may initially expect.

The report estimates that Canada could lose more than 100,000 jobs, while the United States could lose more than 200,000 jobs if the North American trade agreement breaks down.

The warning comes at a particularly sensitive moment in Canada-U.S. economic relations, as Washington prepares for negotiations over the future of the agreement while businesses on both sides of the border continue to face uncertainty over tariffs and changing trade rules.

The report by the Canadian American Business Council (CABC) argues that successfully renegotiating and maintaining the trade agreement would provide significant employment benefits for both countries.

According to the analysis, a successful renegotiation of the United States-Mexico-Canada Agreement (USMCA)—the name used for CUSMA in the United States—could create approximately 137,000 additional American jobs and 98,000 Canadian jobs in 2027, compared with the status quo.

A critical moment for North American trade

CUSMA governs a substantial portion of economic activity between Canada, the United States and Mexico.

The agreement replaced the North American Free Trade Agreement (NAFTA) and was designed to preserve and modernise preferential trade arrangements across the continent.

For Canadian businesses, access to the much larger U.S. market is particularly important.

The United States is Canada’s largest trading partner, while Canadian companies supply American businesses with products ranging from energy and manufactured goods to agricultural products, machinery and automotive components.

The integration works both ways.

American companies also depend on Canadian suppliers, consumers and cross-border supply chains.

That interconnectedness is one of the reasons analysts warn that the consequences of a collapse in the trade agreement would not be limited to Canada.

U.S. also stands to lose jobs

The projected job losses are significant because they challenge the idea that the consequences of ending or substantially weakening CUSMA would fall primarily on Canada.

The CABC report estimates that the United States could lose more than 200,000 jobs, compared with more than 100,000 potential Canadian job losses.

The report’s modelling suggests that preserving a stable trade relationship would actually generate additional employment in both countries.

Its estimate of 137,000 additional U.S. jobs and 98,000 Canadian jobs in 2027 highlights the potential economic value of maintaining predictable cross-border trade rules.

The figures illustrate how deeply integrated the two economies have become.

A product manufactured in Canada may contain components sourced from the United States or Mexico before being shipped back across the border for further processing or sale.

A disruption at any stage can therefore affect businesses and workers in multiple countries.

Trump administration takes harder trade position

The latest uncertainty follows a decision by Washington in July to indicate that it would not renew the agreement in its current form.

The United States has instead pushed for changes as the three countries move towards the next stage of negotiations.

U.S. President Donald Trump has also pursued an aggressive tariff strategy aimed at protecting American industries and encouraging more manufacturing within the United States.

Washington has threatened additional tariffs on Canadian goods, adding to uncertainty for companies that depend heavily on cross-border trade.

The proposed measures have created concerns among Canadian manufacturers, exporters and other businesses whose operations depend on access to the American market.

Canada faces a difficult negotiating environment

For Canada, the negotiations are taking place against a backdrop of increasing pressure on businesses.

Canadian companies have already had to adjust to tariff measures and uncertainty surrounding the future of their access to the U.S. market.

The possibility of further tariffs has increased the urgency of securing a stable long-term trading relationship.

At the same time, Ottawa must balance the need to protect Canadian industries with the economic reality that the United States remains Canada’s dominant export market.

That makes the negotiations particularly sensitive for Prime Minister Mark Carney’s government.

Tariff threat adds to uncertainty

The CUSMA debate is unfolding alongside a separate tariff dispute.

The Trump administration has threatened to impose a new 50 per cent tariff on a wide range of Canadian goods, with the measures expected to take effect on August 19 unless there are changes in the negotiations.

Businesses are therefore facing two related uncertainties: what happens to the existing North American trade framework and what tariff arrangements will apply while negotiations continue.

For companies making investment decisions, uncertainty itself can become a major economic cost.

Businesses may delay hiring, expansion or investment when they cannot predict how much it will cost to move goods across borders.

The automotive sector is particularly exposed

Few industries demonstrate North America’s economic integration more clearly than the automotive sector.

Vehicle manufacturing involves complex supply chains that cross national borders several times before a finished vehicle reaches a customer.

Parts can move between Canada, the United States and Mexico during the manufacturing process.

Changes to tariffs or rules governing the origin of those parts could therefore increase costs throughout the industry.

Higher production costs could eventually affect employment, investment and consumer prices.

Canada’s automotive sector is particularly important to Ontario, where thousands of workers and numerous suppliers depend on the industry.

Energy and agriculture also matter

The potential consequences extend well beyond manufacturing.

Canada and the United States have highly integrated energy markets, with substantial flows of oil, natural gas and electricity across the border.

Agricultural trade is another major component of the relationship.

Farmers and food producers on both sides depend on predictable access to markets across the border.

Disruptions could increase costs for producers, distributors and consumers while creating uncertainty over long-term investment.

Why businesses want certainty

For businesses, the issue is not simply whether tariffs are high or low.

Predictability is equally important.

Companies make investment decisions years in advance based on expected costs, market access and regulations.

A manufacturer considering whether to build a new facility in Canada may need confidence that its products can continue entering the United States under stable conditions.

If that certainty disappears, investment may be redirected elsewhere.

The potential job losses highlighted in the CABC report therefore represent more than immediate layoffs. They could also reflect slower hiring, reduced investment and businesses changing their supply-chain strategies.

Canada and the U.S. are economically intertwined

The report’s findings underline a central feature of the North American economy: Canada and the United States are not simply trading partners; their economies are deeply interconnected.

Millions of jobs depend directly or indirectly on cross-border commerce.

Canadian companies rely on American customers, while American manufacturers rely on Canadian suppliers and resources.

This mutual dependence means that major disruptions can create costs on both sides of the border.

The projected U.S. job losses in the report demonstrate that a breakdown of CUSMA would not necessarily represent a one-sided economic setback.

What happens if CUSMA expires?

If the agreement ultimately fails to survive negotiations, businesses could face a less predictable trading environment.

The precise consequences would depend on what replaces the agreement and what tariff arrangements the three countries establish.

Companies would also have to adjust to any new rules governing the movement of goods and services across the borders.

Some businesses could respond by relocating production, changing suppliers or increasing domestic manufacturing.

Others could pass additional costs on to consumers.

The scale of those adjustments would depend heavily on the terms of any future trade arrangement.

A shared economic interest in reaching a deal

The CABC report’s projections provide an important reminder that Canada and the United States both have an economic interest in maintaining a stable trading relationship.

The report estimates that successful renegotiation could generate nearly 235,000 additional jobs across the two countries in 2027, compared with the status quo.

That figure includes approximately 98,000 Canadian jobs and 137,000 American jobs.

The contrast with the potential losses associated with a breakdown highlights the stakes facing negotiators.

Businesses await clarity

As negotiations approach, businesses on both sides of the border will be watching closely for signs of progress.

Companies want to know what tariffs they will face, what rules will govern cross-border trade and whether they can continue making long-term investment decisions with confidence.

For workers, the stakes are equally significant.

The possibility of more than 300,000 combined job losses under a CUSMA breakdown would represent a major economic shock at a time when both countries are already dealing with broader concerns about inflation, investment and competitiveness.

The road ahead

The future of CUSMA now depends heavily on negotiations between Canada, the United States and Mexico.

Washington’s decision not to renew the agreement in its current form has increased pressure on all three countries to reach a new understanding.

For Canada, securing predictable access to the American market remains a major economic priority.

For the United States, the challenge will be balancing its push for more domestic production with the reality that American businesses also benefit significantly from integrated North American supply chains.

And for Mexico, maintaining access to both major markets will remain central to its economic interests.

The CABC report ultimately presents a clear warning: the consequences of a breakdown in North American trade could extend well beyond tariffs and government negotiations.

They could reach factories, farms, transportation networks, businesses and households across the continent.

With Canada potentially facing more than 100,000 job losses and the United States more than 200,000, the stakes in the coming CUSMA negotiations are becoming increasingly clear.

For workers and businesses on both sides of the border, the priority now is not simply a new trade agreement—but a stable and predictable economic relationship capable of protecting jobs and investment across North America.