The US has triggered a decade of annual reviews on CUSMA, deepening uncertainty for Canadian brokers
The United States has declined to renew the Canada-United States-Mexico Agreement (CUSMA), opting instead for a decade of annual reviews. The decision compounds the uncertainty already shadowing Canada's mortgage market and housing sector.
US Trade Representative Jamieson Greer confirmed the move on July 1, the deadline set in the agreement's text for all three countries to declare their intentions.
"The United States did not agree to renew [CUSMA] in its current form," Greer stated.
"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. However, the agreement remains in force pending resolution of these issues or until the agreement's termination."
The agreement, which does not expire until 2036, stays in effect. But the pivot to annual reviews — a mechanism that now runs for the next decade unless all three parties agree to extend — introduces fresh unpredictability for lenders, builders, and brokers still navigating the fallout of nearly 18 months of Canada-US trade tension.
Any country can withdraw from the pact entirely with six months' notice, though neither Washington nor its trade deputies have indicated any intent to do so.
Canada-US Trade Minister Dominic LeBlanc and chief negotiator Janice Charette represented Ottawa in Wednesday's virtual meeting. Both have consistently framed the deadline as manageable. Negotiations are expected to continue past the US midterm elections and into 2027.
Read more: What Trump's CUSMA threat could mean for Canada's housing market
What the outcome means for mortgage brokers
The agreement currently shields approximately 90% of Canadian exports from US tariffs, making its continuity a core variable for lenders, builders, and brokers managing client conversations around affordability and rate timing.
As the Bank of Canada held its overnight rate at 2.25% on June 10, its fifth consecutive hold, economists at Scotiabank, RBC, and TD Economics all pointed to trade uncertainty as the main reason the central bank is unlikely to move before year-end.
Dominion Lending Centres (DLC) chief economist Sherry Cooper has said the CUSMA outcome could make or break Canada's housing market in the second half of 2026, with a sizeable pool of prospective buyers waiting for economic clarity before committing to a purchase.
Construction costs. CUSMA currently keeps softwood lumber, steel, and aluminium moving tariff-free across the border. These are critical inputs for Canadian homebuilders.
Prolonged uncertainty or any deterioration of those exemptions during annual renegotiation rounds pushes input costs higher.
The Canada Mortgage and Housing Corporation (CMHC) has already flagged that higher building costs due to tariffs are constraining new supply at precisely the moment demand is being suppressed by economic anxiety.
Less supply with compressed demand is a bad equation for affordability long-term.
Aled ab Iorwerth of CMHC highlighted uneven housing construction activity across Canada as regional differences and weaker forward indicators shaped May's results.https://t.co/EyfViWIQQf
— Canadian Mortgage Professional Magazine (@CMPmagazine) June 17, 2026
Interest rates and bond markets. The Bank of Canada cannot use monetary policy to resolve trade uncertainty — RBC Economics has said exactly that. What the BoC can do is hold rates steady while uncertainty persists, which is what it has been doing since October 2025 at 2.25%.
Annual reviews mean annual uncertainty events, which means rate cuts get deferred indefinitely.
Fixed mortgage rates are driven by bond yields, and bond markets price in risk.
Ongoing CUSMA uncertainty keeps a risk premium embedded in Canadian bond yields, which keeps fixed rates elevated even without the BoC moving.
Read more: CUSMA review is now a kitchen-table issue for Canadian clients, poll finds
The employment-housing link. Canada's trade exposure is deeply regional. Ontario's auto sector, British Columbia's forestry industry, and Alberta's energy sector are all sensitive to US trade conditions.
A weakening labour market in those provinces translates directly into softer housing demand, tighter mortgage qualification conditions, and higher arrears risk for lenders.
Investment and new supply. Developers making decisions about whether to break ground on a new project need a multi-year view of construction costs, financing conditions, and end-buyer demand.
Meanwhile, prior to the announcement, Prime Minister Mark Carney made clear he did not expect to sign a renewal of the agreement, saying, "We're expecting a constructive exchange. I wouldn't expect any drama... I'm not looking for my pen."
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