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CUSMA Under Fire: Trump’s ‘Irrelevant’ Comment Sparks Cross-Border Trade Tensions

By [Your Name/Agency] | CA News Desk

A shadow has fallen over the Canada-United States-Mexico Agreement (CUSMA), reigniting fears of a trade war between North America’s closest economic partners. In a series of blistering remarks made during a tour of a Michigan auto plant, former U.S. President Donald Trump labeled the critical trade pact "irrelevant" and took direct aim at Canada’s automotive sector.

The comments, made just weeks before the agreement is set to undergo a mandatory six-year review, have sent shockwaves through Canadian political and business circles. With billions of dollars in cross-border trade at stake, the question on every Canadian policymaker's mind is simple: Is the foundation of North American trade about to crumble?

The Spark: A Tour, a Tarmac, and "Irrelevant" Remarks

The controversy began on a factory floor. While visiting a Ford Motor facility, the former President launched into a critique of the trade deal he originally negotiated and signed in 2018. According to reports from The Globe and Mail, Trump declared the USMCA (the American moniker for CUSMA) "irrelevant" for the United States during the tour.

The rhetoric did not stop there. In subsequent comments reported by CTV News, the former President escalated his attack, specifically targeting Canadian manufacturing. "We don’t need cars made in Canada," he stated, suggesting that the U.S. automotive industry could function entirely independently of its northern neighbors.

These statements were echoed in video coverage by CityNews Kitchener, which highlighted Trump’s apparent indifference toward the upcoming review process. The core of his argument relies on a protectionist stance: that the U.S. possesses sufficient leverage to demand better terms—or bypass the agreement entirely—without suffering significant economic consequences.

“We don’t need cars made in Canada”: Trump calls CUSMA ‘irrelevant’ and takes aim at Canada. — CTV News

These comments are not merely bluster; they signal a potential shift in the geopolitical landscape of North American manufacturing.

Understanding the Stakes: What is CUSMA?

To understand why these comments are causing such a stir in Canadian boardrooms and government offices, one must look at what CUSMA actually does. Replacing the North American Free Trade Agreement (NAFTA) in 2020, the Canada-United States-Mexico Agreement was designed to provide stability and predictability for cross-border commerce.

It is the lifeblood of the Canadian economy. In 2022 alone, total trade between Canada and the U.S. topped $1.2 trillion CAD. For the automotive sector specifically, the agreement enforces strict "rules of origin." These rules dictate that a certain percentage of a vehicle’s components must be manufactured in North America to qualify for zero tariffs.

The deal also includes a contentious "sunset clause" and mandates a joint review every six years. We are rapidly approaching that first review window, scheduled for 2026. It was during a discussion about this looming review that the former President made his "irrelevant" declaration, as reported by CityNews Kitchener.

Contextual Background: A History of Trade Spats

For Canadians, the current tension feels like a case of déjà vu. The relationship between the two nations has long been a rollercoaster of cooperation and conflict.

During his first term, Trump famously referred to Canada as a "national security threat" to justify tariffs on steel and aluminum. He also routinely attacked Canada’s dairy supply management system, calling the country "spoiled" regarding trade practices. The negotiations to replace NAFTA were notoriously bitter, with the Canadian delegation often described as preparing for "hand-to-hand combat" at the negotiating table.

While CUSMA was eventually signed with bipartisan support, the rhetoric coming from the former President suggests that if he returns to office, he intends to renegotiate the renegotiation.

The Automotive Ecosystem

The automotive industry is the most vulnerable sector in this dispute. It is not a one-way street; it is a deeply integrated web. A single car part may cross the border half a dozen times before it is finally bolted into a vehicle.

• The Canadian Factor: Canada produces approximately 1.5 million vehicles annually, largely by the Detroit Three (Ford, GM, Stellantis) and Toyota/Honda.
• The U.S. Dependency: U.S. automakers rely heavily on Canadian parts suppliers and assembly plants for efficiency and cost-effectiveness.

Trump’s assertion that the U.S. "doesn't need" Canadian cars ignores the logistical reality of the modern auto industry. Disentangling this supply chain would take years and cost billions.

Immediate Effects: The Market and Political Response

The immediate fallout from the "irrelevant" comments has been muted in the stock markets—largely because these are campaign trail statements rather than official policy changes. However, the political reaction in Canada has been swift.

Canadian trade officials are closely monitoring the rhetoric. The Canadian auto sector, which employs over 150,000 people directly and hundreds of thousands more indirectly, views these comments as a serious threat to their long-term planning.

If the U.S. administration were to withdraw from or severely cripple CUSMA, the Canadian economy would face: 1. Tariff Reinstatement: Vehicles and parts would be subject to standard WTO tariffs (typically 2.5% for cars entering the U.S.), raising prices for consumers. 2. Investment Chill: Automakers freeze investments uncertain of the future regulatory environment. 3. Supply Chain Disruption: The "just-in-time" manufacturing model would be shattered by border uncertainty.

The "Buy American" Factor

Underlying the comments is the broader push for "Buy American" policies. This protectionist approach aims to bring manufacturing jobs back to the United States. However, experts argue that this is often a zero-sum game.

During the first trade war under the previous administration, U.S. steel prices skyrocketed because of tariffs. This actually hurt U.S. manufacturers more than it hurt Canadian exporters in the long run. If CUSMA is deemed "irrelevant" and the U.S. imposes blanket tariffs on Canadian autos, U.S. car prices would likely rise, making American cars less competitive globally against European and Asian manufacturers.

Future Outlook: The 2026 Review

The mandatory review of CUSMA in 2026 is the critical date to watch. While the agreement includes a provision that it can last for 16 years, with a review at the six-year mark, the political climate of that review will determine the agreement's longevity.

Three Potential Scenarios:

1. The Status Quo: Both sides agree that the agreement is working well and make only minor administrative adjustments. This is the preferred outcome for the business community.
2. Renegotiation: The U.S. pushes for significant changes, particularly regarding dispute settlement mechanisms and rules of origin for electric vehicles (EVs). This would be a complex and likely contentious process.
3. Withdrawal: While legally difficult and economically catastrophic, the rhetoric of "irrelevance" raises the specter of a complete U.S. withdrawal from the pact, reverting North America to a tariff-based trading relationship.

The Electric Vehicle Pivot

One interesting piece of context is the shift toward electric vehicles. The current CUSMA rules were written with internal combustion engines in mind. As both Canada and the U.S. pivot to EVs, there will be pressure to rewrite the rules of origin regarding batteries and critical minerals. Canada has vast reserves of lithium, nickel, and cobalt—resources the U.S. needs for its green energy transition. Paradoxically, while the rhetoric is hostile, the resource interdependence is growing.

Conclusion: A Storm on the Horizon?

The comments labeling CUSMA "irrelevant" should be taken seriously, not as idle threats, but as a signal of intent. For Canada, the trade relationship with the United States is not a luxury; it is an economic necessity.

The upcoming years will test the resilience of the North American trade bloc. While the integration of the Canadian and American economies makes a clean break incredibly difficult, the political will to disrupt that integration appears to be rising south of the border.

Canadian businesses, politicians, and citizens must prepare for a period of uncertainty. The "Golden Age" of seamless cross-border trade may be facing its most significant challenge yet, and the upcoming review could determine the economic trajectory of the continent for decades to come.

This article is based on verified reporting from The Globe and Mail, CTV News, and CityNews Kitchener. It is intended for informational purposes and does not constitute financial or legal advice.