Tariff deal with Trump unlikely before U.S. midterms, says Canada's former trade chief

Canada's former chief merchandise treater said mon he doesn't look capital of canada to reach a tariff deal with Washington before the U.S. Midterm elections.

Steve Verheul told an online business audience that there could be a window when U.S. President Donald Trump and his administration are looking for a political win before American voters head to the polls in the fall.

"If that happens, there's a possibility for it to come together," Verheul said.

"But I think it's more likely that the discussions will continue beyond the midterms and possibly even into next year."

Verheul led talks for Canada during the renegotiation of the North American free trade pact during Trump's first term. He's now principal at the public affairs agency GT & Co.

He was speaking at an event for Bank of Montreal clients charting the trade outlook ahead of July 1, when the review of the Canada-U.S.-Mexico Agreement, or CUSMA, formally kicks off.

Premier Ford heading to the U.S. For the 3rd time this month ahead of July 1 CUSMA deadline

While Canada and Mexico have both signalled they'd like to see CUSMA renewed beyond 2036 for another 16-year period, the U.S. Could opt to send the deal to rolling annual reviews.

Trump could also trigger a clause to exit the agreement at any point with six months' notice.

Prime Minister Mark Carney said earlier this month it's "no secret" the U.S. President is not the biggest fan of CUSMA but stressed there are specific sectors where Canada continues to press the Trump administration to work with Ottawa.

BMO chief economist Doug Porter said he puts "a very low probability" on the United States tearing up the agreement.

Porter acknowledged there's been basically no growth in the economy over the past year, as U.S. Tariffs have tanked Canadian exports, but he would not consider Canada to be in a recession.

BMO's forecast, which sees the economy struggling to grow in 2026 before rebounding in 2027, assumes the U.S. Tariff stance remains broadly unchanged over the coming year.

Carney’s trade team braces for a CUSMA summer

While Trump has mused openly about walking away from CUSMA, Verheul noted there's broad support among the U.S. Public, businesses, senators and members of Congress for renewing the trade pact.

He also said CUSMA still shields most Canadian exports from U.S. Tariffs, which is a good sign the United States sees value in keeping it in play.

Why U.S. Agriculture believes CUSMA will survive Trump's threats

Trump is unlikely to rip up CUSMA, his trade deal with Canada and Mexico. Here's why

A key CUSMA 'checkpoint' is coming. Businesses and unions are balancing anxiety and hope

What's more important for Canada is addressing steep U.S. Sectoral tariffs on steel, aluminum, autos and some other commodities, he said.

Verheul said he doesn't think "anything close to a good deal" for Canada has been put on the table so far, and he questioned the value of tariff deals that other countries have cut with Trump.

"Those agreements are unlikely to stand the test of time over a period because they're not particularly solid agreements," he said.

Reporter

Craig Lord is a reporter with The Canadian Press.

---

---