The Canada-US Business Association calls for a suspension of the Section 338 tariff measures imposed by the United States and the countermeasures that the Government of Canada has announced will take effect on September 8, 2026. An escalating cycle of tariffs and retaliation will ultimately harm businesses, workers, and consumers on both sides of the border.
Canada and the United States already have a comprehensive, mutually negotiated framework governing their trading relationship: the United States-Mexico-Canada Agreement, known as the USMCA in the United States and the CUSMA in Canada. Both countries negotiated, signed, and implemented this agreement to provide clear rules, predictable market access, and established procedures for resolving trade disputes. Unilateral tariffs and retaliatory measures undermine the certainty and stability that the agreement was intended to provide.
Canada and the United States do not simply trade finished products with one another. Our economies are deeply integrated through supply chains in automotive manufacturing, agriculture, energy, construction, metals, technology, and countless other industries. Components and materials frequently cross the border several times before reaching the customer. Each new tariff therefore compounds costs, disrupts production, delays investment, and weakens the competitiveness of U.S. and Canadian businesses.
The economic consequences are measurable. The Bank of Canada has projected that U.S. tariffs will leave Canadian GDP approximately 1.5% below its pre-conflict outlook by the end of 2026. In Ontario alone, an independent provincial analysis estimated that a sustained tariff scenario could result in approximately 119,000 fewer jobs in 2026 and reduce manufacturing output by 8% compared with a no-tariff scenario. On the consumer side, Canadian retail prices for products subject to the 2025 counter-tariffs rose approximately 6% more than comparable non-tariffed products. In the United States, Federal Reserve researchers estimated that the broader tariffs implemented through November 2025 increased core goods prices by approximately 3.1% through February 2026. If the current dispute persists, businesses and households should expect these pressures on costs, employment, investment, and economic growth to deepen.
Tariffs increase the cost of food, vehicles, housing, equipment, and everyday goods; place particular pressure on small and medium-sized businesses; and create uncertainty that discourages hiring and capital investment. Communities near the border, whose prosperity depends heavily on the efficient movement of goods and people, bear a disproportionate share of these consequences.
CUSBA calls on both governments to halt further escalation, begin the orderly removal of tariffs and counter-tariffs, and return immediately to constructive, time-bound negotiations. The established consultation and dispute-resolution provisions of the USMCA/CUSMA should be used to address legitimate trade concerns while preserving the reliable market access and predictability businesses require.
For generations, Canada and the United States have built one of the world’s most successful economic partnerships. The objective should not be to determine which country can withstand more economic pain, but to restore trust, uphold the commitments already made under the USMCA/CUSMA, strengthen shared supply chains, and improve U.S.-Canada competitiveness. Cooperation, not an extended trade conflict, is the path to greater prosperity and economic security for citizens of both countries.
–The Canada-U.S. Business Association
Supporting Economic Sources:
1. Bank of Canada, Canadian Economic Outlook (January 2026)
3. Bank of Canada, How Canada’s Counter-Tariffs Impacted Consumer Prices
4. U.S. Federal Reserve, Detecting Tariff Effects on Consumer Prices in Real Time – Part II
Note: Economic estimates reflect the scope, timing, and assumptions of the cited studies and may change as tariff policies evolve.
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