Canada may benefit from taking a patient approach in upcoming trade negotiations under the Canada-United States-Mexico Agreement (CUSMA), as economic and geopolitical pressures continue to build on the United States, according to former chief trade negotiator Steve Verheul.
Verheul, who led Canada’s trade negotiations from 2017 to 2021, said mounting challenges facing the U.S. — including global instability and policy outcomes — could ultimately strengthen Canada’s position at the negotiating table. Speaking at a panel hosted by Bank of Montreal, he noted that time appears to be working in Canada’s favour.
He pointed to U.S. President Donald Trump’s second-term trade strategy, which relies heavily on broad tariffs against multiple trading partners, arguing that it has not delivered the expected economic benefits, particularly in reviving domestic manufacturing jobs.
At the same time, global supply disruptions linked to the ongoing conflict in Iran have impacted key commodities such as energy, aluminum, and fertilizer. Verheul said Canada’s role in these supply chains places it in a strategic position to support U.S. needs during a period of uncertainty.
He added that volatile global conditions are increasing demand for stable and predictable trade partners — an area where Canada has a competitive advantage.
Concerns are also growing within the U.S. Federal Reserve, where officials have warned that the conflict could fuel further inflation. Minutes from the Fed’s March meeting suggest interest rate hikes may still be under consideration as policymakers respond to these pressures.
The CUSMA agreement, which governs North American trade, is due for a formal review this year, marking six years since it came into force on July 1. U.S. Trade Representative Jamieson Greer is expected to outline Washington’s position on the agreement by June 1.
Greer acknowledged that while not all issues may be resolved by the July deadline, progress is being made. He also indicated that the U.S. has distinct concerns with Canada and Mexico, and that side agreements with each country are likely to accompany any broader deal.
As negotiations approach, analysts suggest Canada’s stability and resource strength could play a key role in shaping the next phase of continental trade relations.
