Canada warns USMCA could face annual review, cites investment chill

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Dominic LeBlanc, Canada’s minister for U.S. trade, warned Thursday that the United States-Mexico-Canada Agreement could be subject to annual reviews, arguing that uncertainty could be an outcome sought by the Trump administration. Speaking to a business audience in Toronto, LeBlanc said he expects to confront U.S. Trade Representative Jamieson Greer in Washington next week ahead of the mandatory USMCA review scheduled for July.

LeBlanc said the USMCA would continue if there is no consensus in that July review, followed by an annual review process. “If there’s no consensus in the review the agreement continues. Then there’s an annual review that starts and if uncertainty is one of the objectives from one of our (USMCA) partners you can imagine scenarios of how this might go,” he said.

LeBlanc linked that potential review-and-uncertainty cycle to changes in business behavior in Canada. He said the current uncertainty about the future of the free trade deal is causing a break in investment decisions and that “Net business investment is down,” adding that Canada needs to focus on what it can control.

The warning came as Canadian Prime Minister Mark Carney has set a goal for Canada to double its non-U.S. exports in the next decade. LeBlanc’s remarks also reflected Carney’s recent diplomatic moves, with Carney having made a trade deal with China and being in India this week, the Associated Press reported.

LeBlanc said he was “not pessimistic” about the future of the trade deal, pointing to a U.S. exemption under USMCA that he said has been maintained when Trump announced new tariffs recently. In his framing, the exemptions meant the U.S. action was aligned with U.S. economic interests, not a move aimed at fully severing the trade relationship.

The minister acknowledged that tariffs are still affecting parts of Canada’s economy, “particularly aluminum, steel, auto and lumber.” While he said most Canadian exports to the U.S. are currently exempted by USMCA, he described sector-specific pressure as part of the broader trade strain.

LeBlanc also recounted that Canada had been close to securing a deal on sectoral tariffs in the fall before Trump ended talks abruptly. He said the talks stopped in response to an antitariff TV ad produced by the Ontario government, adding that he has seen the negotiations become entangled with public politics.

LeBlanc said Trump administration officials have been engaged in a “political argument” about trade in public, while he insisted that closed-door conversations have not followed the same path. “There is a public prosecution of the argument, the political argument in the United States, and there are the private government-to-government-to-government conversations, which are not discouraging,” he said.