Canada Faces Severe Economic Consequences if US Withdraws from CUSMA

A Deloitte report warns that if the US withdraws from CUSMA, Canada's economy would suffer significantly. In the worst-case scenario, Canada's real GDP could fall by 1.6% or $402 billion over a decade, and employment could shrink by 163,000 jobs annually.

The report highlights manufacturing as one of the most affected sectors, with motor vehicles and parts seeing a 28% plunge in real GDP, electronics losing 21%, and chemicals dropping 13%. The oil and gas sector would also suffer, with oil sales to the US declining by 11% and natural gas plummeting by 30%.

The report suggests that Canada needs to look beyond trade diversification to mitigate the impact. It recommends removing interprovincial trade barriers, fostering new industries, and investing in defense and export infrastructure.