U.S. Tariffs, CUSMA and Europe: What’s Next for Canadian Business?

Toronto, ON – September 19, 2026

Canada’s trade relationship with the United States has entered another period of significant uncertainty. CUSMA remains in force, but Canada and the United States have not reached agreement on its long-term renewal; formal bilateral trade negotiations are currently suspended; new tariffs are affecting Canadian industries; and Ottawa is accelerating efforts to diversify trade toward Europe and other international markets.

For Canadian businesses, the question is increasingly: What should we be doing now to protect our operations, employees and markets?

Where CUSMA stands

The first formal CUSMA Joint Review took place on July 1. Canada has stated that it wants CUSMA renewed and continues to support the three-country agreement with the United States and Mexico.

CUSMA remains fully in force until 2036. However, because the parties did not agree in July to extend the agreement for another 16 years, the review process continues.

Canada is seeking greater certainty for businesses and wants the United States to address sectoral tariffs affecting industries including steel, aluminum, automotive and softwood lumber.

Are Canada and the U.S. still talking?

Yes — but there is an important distinction.

Prime Minister Mark Carney suspended the latest round of formal trade negotiations in August after saying the proposed U.S. terms were not in Canada’s economic interest.

Minister responsible for Canada-U.S. Trade Dominic LeBlanc has indicated that communications with American officials are continuing even though formal negotiations have not restarted. Canadian officials have remained in contact with U.S. Trade Representative Jamieson Greer and other American officials.

Canada says it is prepared to return to negotiations if an agreement can protect Canadian industries, provide greater certainty, and respect Canadian sovereignty.

What is the United States saying?

The Trump administration has blamed Canada for the breakdown in negotiations and has accused Ottawa of discriminatory treatment of American exports.

The United States has imposed 50% tariffs on approximately $27.6 billion of Canadian goods, along with additional measures affecting particular Canadian products and industries.

Washington argues that its actions are intended to obtain greater reciprocity and access for American exporters. Canada argues that the U.S. demands went too far and that accepting the proposed agreement would have harmed strategic Canadian industries and restricted Canada’s ability to make independent economic decisions.

The two sides therefore remain significantly apart on important issues.

Canada responds with counter-tariffs

Effective September 8, Canada introduced new 15%, 25% and 50% counter-tariffs covering approximately $27.6 billion of U.S. imports.

Products affected include goods in sectors such as:

• Steel and aluminum
• Automotive
• Dairy and food processing
• Appliances
• Agricultural equipment
• Pulp and paper
• Electronics
• Clothing and furniture
• Manufacturing and industrial products

Businesses that depend on U.S. components, machinery or other inputs can also be affected even when they do not export directly to the United States.

Canada is looking beyond the United States

Prime Minister Carney has made trade diversification a central part of the government’s response.

Canada’s stated objective is to double non-U.S. exports over the next decade, generating an additional $300 billion in trade.

Europe is becoming an increasingly important part of that strategy. Canada and the European Union are pursuing deeper cooperation in trade, defence procurement, energy, critical minerals, technology, artificial intelligence, digital trade and investment.

Canada and the EU are preparing for their next summit on October 29–30, and discussions are underway about a potentially much deeper economic and security relationship.

For Canadian businesses, diversification could create opportunities to reduce dependence on a single export market and pursue new customers, suppliers, investment and partnerships in Europe and elsewhere.

How are Canadian businesses coping?

The effects are not limited to companies that export directly to the United States.

Businesses are dealing with higher input costs, disrupted supply chains, cancelled or delayed orders, cash-flow pressure and uncertainty about future investment. Small and medium-sized companies can be particularly exposed because they often have fewer alternative suppliers and markets.

Manufacturers using specialized U.S. machinery, steel, components and other inputs are also examining whether Canadian counter-tariffs increase their costs.

That makes it important for businesses to review not only where they sell their products, but also where their equipment, components and raw materials originate.

Government assistance is available

The federal government has announced a new and expanded $7.5-billion support package for Canadian workers and businesses, building on earlier tariff-response measures.

Programs include:

Regional Tariff Response Initiative
The government has committed an additional $1.5 billion. Eligible SMEs may be able to access up to $3 million in non-repayable support, including up to $2 million for demonstrated liquidity needs, as well as assistance for business pivots, productivity improvements, diversification and capital investment.

BDC Pivot to Grow
A new $500-million liquidity stream is intended to provide working capital to SMEs experiencing cash-flow pressures because of U.S. tariffs.

Canada Strong Diversification Fund
An additional $2 billion is being directed to help tariff-affected companies invest, diversify, and adapt their operations.

Large Enterprise Tariff Loan
Financing is available for qualifying large Canadian companies experiencing financial pressures resulting from tariffs and countermeasures.

Additional federal and provincial programs may also be available depending on the company’s sector, location, size, investment plans and the nature of the tariff impact.

What should your business be doing now?

Canadian businesses should be examining:

• How U.S. tariffs and Canadian counter-tariffs affect their products and supply chains;
• Whether government tariff-relief programs can help with cash flow or investment;
• Opportunities to source more products and components in Canada;
• Opportunities to automate, modernize and increase productivity;
• New customers and markets in Europe and elsewhere;
• Government procurement opportunities;
• Whether planned capital investments may qualify for government assistance; and
• How future CUSMA changes could affect their operations.

How GTA Strategies can assist

GTA Strategies can work with your company to identify the government programs, financing and grants that may apply to your business and help prepare the necessary applications.

We can also assist businesses with government relations, tariff-related issues, market diversification, Canadian and international business development, procurement opportunities and engagement with federal, provincial and municipal governments.

If your business has been affected by the Canada–U.S. trade dispute — even indirectly through suppliers, customers or increased costs — we would be pleased to review your situation and discuss what assistance may be available.

Please contact us to arrange a discussion.