Canada-U.S. tariff deal: stop waiting for trade certainty

Beyond trade: a new economic architecture 

The emerging deal is likely to be far broader than a conventional trade agreement, according to Nanji. He points to Greer’s own description of a “comprehensive market access agreement” covering economic security and digital alignment, as well as Trump’s mention of the Keystone XL Pipeline – a signal, Nanji believes, of an energy component embedded in the broader framework. 

Despite the apparent breakthrough, Nanji cautions against viewing it as a return to the preferential market access Canada enjoyed under the Canada-United States-Mexico Agreement (CUSMA). All tariffs imposed since January 2025, he notes, have been applied in violation of CUSMA’s terms – and a new deal doesn’t erase that precedent. 

“The days of a comprehensive free trade deal are over,” he says. “The United States and the Trump administration has made it very clear that it has a protectionist trade policy – a trade policy that very much believes that in order to have access to the world’s largest market, you need to pay a market access fee, which in essence is the tariffs.” 

Canada’s average tariff rate currently sits at approximately three per cent, with 85 per cent of Canadian products entering the U.S. tariff-free, compared to an average rate of more than 11 per cent for other trading partners, according to Nanji. Any deal is likely to erode that advantage, at least partially – a cost Canadian employers will need to factor into their workforce and investment planning, he says. 

“Canadian businesses are going to have to live with some level of tariffs, certainly for the rest of the Trump administration, and it’s yet to be seen whether in future years future presidents might be willing to negotiate this again,” says Nanji.