Current CUSMA Landscape: The Importance of Carney's Advisory Council
,,,and a way forward
Carney’s rejigging of Trudeau’s US-Canada Advisory Council is significant for several reasons. For starters its composition is interesting. The lack of “old guard” academic economists and academic negotiation experts suggests that those who failed to view the U.S. as a “predator” are not fit to advise the government now as they once were. In fact, Carney’s Council could be seen as deliberate strategy to dismantle the “old guard” to overcome institutional inertia. Carney’s recent shake up in the civil service, creation of this “PCO-friendly” Advisory Council and the consolidation of influence in the PCO are indicative of this shift. While critics may see these new appointments and the diminishment of GAC’s role in trade negotiations, as a loss of expertise, proponents should view them as a necessary clearing of stagnant departmental silos.
However, with its practitioner and operational approach, the Council risks focusing on short-term, tactical issues rather than addressing the “grey zone” structural erosion of Canadian national interests and sovereignty. The “truth” these Advisors must face isn’t just about tariffs, but about how U.S. policy uncertainty is used as a tool of control to keep Ottawa in a reactive, subordinated position. Strategic patience is key, but so too is the need to protect and grow Canada’s sovereignty.
For that reason, it is reasonable to ask if Carney’s Council will push for true Canadian agency or simply manage dependency on the U.S. Looking ahead, Carney and his advisors must set a “red line” regarding acceptable concessions in public policy, particularly regarding long-term, systemic threats. Without that public discussion, there is a legitimate fear that the Council will prioritize short-term gains (like quarterly profits) over long-term strategic reforms to protect Canadian sovereignty.
The Council has its work cut out. This is the most volatile period of pre-negotiations Canada has seen since entering into a free trade deal with the U.S. during the Mulroney era. Apart from the usual “supply side management issues” and related trade “irritants” key sticking points include:
The “Sunset Clause” Trigger: July 1, 2026, is the deadline for all three countries to confirm in writing that they wish to extend the deal for another 16 years. If any country (most likely the U.S.) refuses to sign, the deal doesn’t die instantly, but it enters a state of perpetual “death-watch” with mandatory annual reviews until it expires in 2036. This is the Zombie CUSMA which I have written about here.
Fear of the Unknown: The Trump administration has signaled that a “rubber-stamp” extension is off the table. U.S. Trade Representative (USTR) Greer has explicitly stated that “renegotiation, revision, or exit” are all active options.
Tariff Leverage: Recent 2025 and 2026 tariffs (including a recent 15% global rate hike and specific sector duties on steel and autos) are being used as “grenades” to force Canada and Mexico into concessions before the July deadline.
Supreme Court Impact: A recent U.S. Supreme Court ruling (February 20, 2026) struck down certain broad global tariffs as illegal. Analysts suggest this may actually harden the U.S. stance in CUSMA talks, as the administration seeks to codify its trade barriers within the treaty itself to avoid future legal challenges.
Ambiguity: US negotiator Jamieson Greer recently stated Canada must accept “some level of higher tariff” and participate in “reshoring” American jobs if it wants to keep the CUSMA trade deal. The most recent of these “reshoring” issues is the request that Canada set up Aluminum manufacturing in the U.S. in exchange for tariff relief. Greer also stated that Canada would have to make a variety of concessions in advance of the negotiations which is a clear pressure tactic to rattle the market.
Salami: These tactics are exactly the “Salami-Slicing” I predict in my vulnerabilities paper. In essence Greer and others such as Lutnick are incrementally raising the “cost” of Canadian trade independence. For example, by invoking Section 122 (based on “Balance of Payments” crises) immediately after losing the IEEPA case at SCOTUS, Greer proves my point that the US will simply pivot to whatever legal ambiguity is available to maintain pressure and uncertainty.
Market Anxiety: By keeping the “rules” of the relationship slightly unclear (Zombie CUSMA) the US has created a permanent state of anxiety for Canadian investors. This isn’t a by-product of a messy democracy; it’s a tool used to ensure Canada doesn’t drift toward independent trade deals.
What can the Council do to offset these debilitating tactics?
The Council can support and amplify research demonstrating that American legal ambiguity, grey zone tactics and shifting trade rules are actually more destabilizing to Canadian interests than the actions of overseas rivals.
The Council can support the debate and discussion about the new realities of America’s “weaponised interdependence.” Canada’s policy culture is deeply socialized within U.S.-centric frameworks, which creates internal confusion when trying to pivot toward domestic resilience and reduced dependence. It will take time and support to develop the “intellectual” and advisorial infrastructure for this shift.
The Council should support the development of a long term strategy for Canadian sovereignty. Without a full framework/roadmap the “old guard” will co-opt Carney’s strategy to sustain their “outdated” bi-polar view of the world. That will leave Canada vulnerable to long-term dependency disguised as “realpolitik”.
If Davos created a crisis of clarity within Canada’s public service, academe and MSM then these trade negotiations will be the “establishment’s” “hand revealing exercise”. By prioritizing an existential “pivot” Carney is essentially forcing a shift toward economic agility over established U.S.-driven deference. This is a clear signal to the “High Priests of the Old Order” to stand aside. We need a "National Dream 2.0" to maintain autonomy not business as usual.
On a way forward please read my Best Case Scenario here and my Designing Sovereignty paper here.