Canada's Trade Diversification Gains May Only Partly Offset USMCA Losses, Deloitte Says

12:43 PM EDT, 09/03/2026 (MT Newswires) -- Canada's efforts to diversify its trade could provide significant benefits, but they may not be enough to offset the economic damage that could result from the collapse of the North American free trade agreement, according to research from Deloitte Canada emailed on Thursday. If the US-Mexico-Canada Agreement (USMCA), or CUSMA as it's known in Canada, were to collapse, Canada's real gross domestic product could be 1.6% lower by 2036 compared with the baseline, said the Deloitte Canada research. That would amount to CA$402 billion in cumulative lost GDP over the decade and an average of 163,000 fewer jobs each year. Manufacturing would be among the hardest-hit sectors, with motor vehicle and parts production projected to decline by 28%. By contrast, faster trade diversification could boost Canada's real GDP by 0.6% by 2036, adding $141 billion in cumulative GDP and supporting an average of nearly 53,000 additional jobs each year, added Deloitte Canada. The findings show that while trade diversification is important, it has its limits. Expanding into new markets could reduce Canada's exposure to US trade risks, but it wouldn't fully offset the benefits of preferential access to its largest trading partner.