On July 1st, while Canadians were celebrating the country's 159th birthday, the United States Trade Representative released a statement.

"The United States did not agree to renew the USMCA in its current form. As a result, CUSMA is not renewed. The United States will continue to engage with Mexico and Canada to address the agreement's shortcomings and our trade deficits with these countries."

That is Jamieson Greer, Trump's trade representative, officially declining to extend the agreement that covers 85 percent of Canadian exports.

The details matter more than the headline.

CUSMA is not dead. The agreement stays in force until 2036. Trade continues under existing terms. Nothing collapsed on Wednesday.

But Canada and Mexico both wanted a 16-year extension to 2042. Certainty that businesses could build around. The US said no. Instead, CUSMA now enters annual reviews — every single year, for up to a decade, the agreement gets re-examined. And the Trump administration reserves the right to withdraw entirely with six months notice at any point.

One analyst put it plainly: if no agreement is reached, we review it next year. And the year after. And the year after that.

That is the real cost. Not a collapse. Ten years of walking on ice.

Uncertainty is not an abstract problem. It shows up in specific places. Bond markets now have to price in CUSMA risk every year, which keeps fixed mortgage rates elevated even if the Bank of Canada never moves. Businesses making ten year investment decisions; a factory, a mill, a processing plant: now face a trade framework that could shift annually. The Bank of Canada already projects GDP will finish 2026 roughly 1.5 percent lower than its pre-tariff trajectory. Youth unemployment is sitting at 13.4 percent. Canada carries the largest household debt burden in the G7.

None of those numbers improve when the country's largest trading relationship gets an annual expiry check.

And there’s more, Canada and the US have not started official bilateral negotiations. Not round one. Meanwhile the US and Mexico are already on their third round of talks, scheduled for the week of July 20th.

Canada's former chief negotiator Steve Verheul said this week he does not expect a deal before the US midterm elections this fall. Possibly not until 2027.

So the honest picture is this. The agreement survives. Trade continues. But every mortgage renewal, every factory investment, every export contract in this country now carries a question mark that renews annually. The US is negotiating with Mexico first and Canada is waiting for a phone call.

A slow-moving problem is still a problem. It just gives you time to see it coming.

That is the Canadian take.

Until next time,

Dean

P.S. If you had to make a ten-year bet on your job, your mortgage, or your business right now, how does this change your thinking? Hit reply and tell me.