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CUSMA comes into force and Biden is elected President: Calmer seas ahead for U.S.-Canada trade?

Author(s): Alan Kenigsberg, Gajan Sathananthan

Dec 8, 2020

After a rocky 2019, global trade faced another challenging year in 2020 with the COVID-19 pandemic and continued aggressive trade actions by the United States.

The largest change to Canada’s global trading relationships occurred close to home, with the implementation of the Canada-U.S.-Mexico Agreement (CUSMA), the successor to the North American Free Trade Agreement (NAFTA). However, the stability many had hoped CUSMA would bring to Canada-U.S. trade was short lived. Only a few months after the implementation of CUSMA, the Trump administration levied tariffs on certain Canadian aluminum goods due to alleged surges in imports, and Canada announced potential countermeasures in retaliation. Though the United States ultimately suspended the tariffs before the application of Canadian countermeasures, there remains some risk that they could be reapplied in the wake of the U.S. election (though a Biden presidency would materially reduce this risk). With all of this happening alongside a global pandemic that disrupted supply chains and introduced new “protectionist” attitudes, 2020 proved to be an eventful year in cross-border trade...