The Current - Should CUSMA be renewed or reworked?

Episode Date: July 1, 2026

With today's CUSMA deadline, we speak with three business leaders — one in Canada and two in the US — who give their differing perspectives on why CUSMA needs to be renewed or reworked.

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This is a CBC podcast. Happy Canada Day, everyone. This is a day of celebration for many people, but this year it is also a day of uncertainty for a lot of businesses. Canada's trade deal with the United States and Mexico faces a joint review deadline today. If all three countries agree, Kuzma, known as the USMCA in the United States,

will be extended for 16 years. If not, the deal could be renewed every year until 20. or one country could trigger the end of the agreement with six months official notice. No matter what happens, there are consequences for the economies of all three countries and also for the companies who trade their goods and services. Mike Baker is the CEO of the Wood Manufacturing Cluster of Ontario. It represents about 3,500 companies in the province. Mike Baker is in Owens Sound, Ontario, and we recorded this segment earlier.

Your industry is one that has been hit with tariffs. What has happened to cabinet sales in Canada since the American president put tariffs in effect last year? Well, there's a couple of things that have happened. One of them, first of all, is you've got a very strong network that existed through the United States of cabinet dealers, where we've got manufacturers here in Canada. They'd have dealers in the U.S. And for many, many, many years, 50, 60 years longer, that network has grown. All of a sudden, the 25% tariff that's been put on since last October is having a big impact on companies where they're bidding for jobs.

Their costs have gone up. Obviously, the prices are higher. Some dealers are sharing that 25%. But in many cases, when they bid for jobs, their costs are higher and they lose out on million-dollar contracts at a time. So there's a loss of work on one side of it, which trickles down to plant closures, shrinking. of companies. And then the other piece that happens is you get larger companies who are of pretty high volume, maybe lower end cabinets that would go to large box stores in the U.S. are flooded onto the Canadian market. And they're competing with our own cabinets that many companies don't

export as well. So it's now competing domestically. So that's drove those prices up. It's going to drive internal competition at a different scale. And then the other thing that's happening is there's the whole uncertainty when it comes to when tariffs rise, input costs increase across all industries. Companies slow down on investment, expansion plans get paused, there's hiring freezes, and cost control becomes the priority more than ever. Kitchen renovations are delayed, closet vending upgrades are pushed out indefinitely. Discretioning spending across all households are tightening. And then the other trickling effect is we've got basically a higher level of inflation, cost living is gone up. Unemployment's around 7% Ontario now. So if it keeps going on the way it is,

it's going to get worse. So it's not a good situation. And the way the agreements we've had in the past, the free trade, that was, it fostered the growth of the network of integrated trade through different industries, not just ours, but, you know, ours is a fairly large industry in Canada. There's over in Canada wide, there's about 7,000. companies and about 100,000 employees in this industry. Cabinet tree is just one segment of the advanced wood manufacturing industry. And Mike, you mentioned the loss of work. Do you have a sense or do you have numbers about how many people have been laid off?

Oh, well, I could say like 5% to 10% of companies have scaled back. They're not expanding so far. And the uncertainty is just freezing everybody. It's crippling everybody. And there's not that sense of confidence to invest. in new equipment, digital integration. These are the types of things that make companies resilient and to sustain during tough times.

And many companies are getting caught. So it's not a good situation. And, you know, there's been a lot of plant closures across the province. And these aren't just, you know, startups are poorly owned companies. These are some companies that have been operating for 50 years. And they happen to design their business based on export to the U.S. Let me ask you this, the tariffs that you've been dealing with, these are separate from Kuzma. So if a broader trade deal is signed or continued, to what extent would that, even though they're outside of that,

give you confidence about what's headed for your industry? Well, it'd be nice that didn't have to be renewed every year. I mean, that means every year people are going to go, what's going to happen, you know? Am I going to hold back? I'm going to take this chance, you know, to send a salesperson down to the U.S. and shake hands and make deals and grow it? Am I going to do that? Or I'm just going to get my arm chopped off next year

when the terms of the agreement change? An agreement should be one that's for a long time where companies can feel confident in taking risk because that's what this is all about. This is all about companies taking risk. And if companies don't take risks that are manageable, then they don't grow. And if we don't grow, well, we all know what happens

when companies don't grow. They close down. And Mike, there's sort of two tracks on the trade front. One is the Kuzma renegotiation. The other is these sectoral tariffs, which are affecting industries, including you. What would you like to tell the politicians right now working to get some kind of trade relief and a trade deal done? It needs to be comprehensive, inclusive. There shouldn't be sidebar sectoral tariffs.

Everything should be encompassed into an agreement that makes all segments grow equally. so all companies within all segments can take manageable risks and not have that uncertainties. Mike, it's been good to hear from you. Thank you very much. Thank you for having us. Mike Baker is the CEO of the Wood Manufacturing Cluster of Ontario. Well, of course, this is affecting companies in all three countries, Canada, US, and Mexico. Last month, Jamie Beyer of the American Soybean Association, testified before the U.S. House Agriculture Committee. She explained why soybean growers in the United States want to keep Kuzma, known as the USMCA in the United States, largely intact.

Jamie Beyer joins me now from Wheaton, Minnesota. Jamie, good morning. Good morning. You're a soybean farmer. How have American soybean farmers benefited from USMCA? So under this agreement, we've been able to grow exports to Mexico and Canada. We've seen a doubling of our exports to Canada and a quadrupling of our exports to Mexico. And last month, you addressed the U.S. House Agriculture Committee on this issue. What did you tell them? We relayed our support for a continuation of this agreement.

We consider it a gold standard where the agreement itself includes a great deal of processes and procedures that help facilitate trade across our countries and allow us to make investment in that long-term relationship that we have. Canada and Mexico are our second largest export customer, and soybeans are the U.S.'s number one export. So this is a pretty important agreement for the soybean world. Yeah, you said, look, I'm a farmer, not a trade expert. And what you want to know is that a 16-year agreement allows you to make plans and be more competitive. So why would we end this thing? What did you hear from the committee in response? I think, you know, our committee members are, you know, from different states, and they're all interested in how that impacts

their state specifically. It's a wide encompassing agreement that covers a lot of sectors. When it comes to soybeans, I think one of the messages that we were trying to relate is the importance of trade across borders in both directions. So specifically where I am in Minnesota, we export 5.6 billion in goods to Canada. And in return, we get things like fertilizer. So we take 330 million in fertilizer from Canada. And so that two-way relationship is so important for us. So there's sort of three options ahead. One is that things continue on as normal, but it's renewed every year when it comes

to Kuzma, the USMCA. It could be terminated by one of the parties with six months notice or they could sign another long-term deal. What would be best for you and your business? specifically for soybeans if this was you know if jamie's queen for a day soybeans would like a 16 year full renewal i think it's been a fantastic agreement for us and it has facilitated trade reduced barriers has an open predictable process to it and provides for enforceable rules

and short of that if this just continues on but needs a renewal every year what kind of stability or instability does that give you? Like Mike Baker said, it adds that level of uncertainty and we're always trying to reduce our risk when it comes to these sorts of things. I'm part of a volunteer organization and so we volunteer our time going to D.C. and talking with folks about agricultural policy and leaving that to a year-to-year negotiation does seem quite daunting. Mike talked about the industry that he represents, company that he represents, all the consequences over the past years.

A soy bean farmer in the United States, have you felt the consequences acutely over the past year? I would say not at the farm level, but certainly, you know, this agreement was meant to sort of bridge the political changes. And so it has more of a generational impact. I mean, certainly where it comes to promotion of information sharing and procedures for pesticides, adoption for gene editing, for biotech, for so many things way beyond just regulating, you know, an export amount, that it becomes really foundational to how we do business. I think you said if I could be queen for a day. You might not be queen for a day, Jamie, but you might have ears of politicians both local and statewide and national in your country.

What do you want to say to them as a soybean farmer? And for the people, who are involved directly in these negotiations, what is your message to them? As a farm, we have so little control over where our product ends up. But what I do know is that we need trade agreements in place to get it from the farm to our expert customers. And this has been a fabulous agreement for us. We'd love to see more of them. We provide a high-quality bean that's full of protein and oil, and our customers love it. We just got to find that price point that they can afford and we can live with.

Jamie, we appreciate you sharing your thoughts from the soybean farm and industry. Thank you very much. Thanks, Theo. Jimmy Byer is a soybean farmer and an executive member of the American Soybean Association. She's in Wheaton, Minnesota. Well, while American soybean farmers want to keep the trade deal alive, tomato growers in the United States are calling for changes to coupons. If you sold somebody a loaded gun who you knew was in a vulnerable state and they shot themselves,

I think it is murder. Just because you're using the internet doesn't mean you get away with murder. I'm Damon Fairless, host of Hunting Warhead. This season, I take you inside the business of suicide, and the places desperate people go when they can't find what they need in the real world. Hunting the Suicide Salesman. Available now wherever you get your podcasts. Robert Gunther is the executive director of the Florida Tomato Exchange.

She joins us from Maitland, Florida. Robert, good morning. Good morning, Pierre. How are you? I'm very good. So interesting perspective you have because our last two guests are like, let's keep this thing as is. What are your concerns with the USMCA? Well, yes, it's been interesting hearing Jamie and Mike talk. And I think there is some common ground between, you know, all of us, even though there is distinctions of how to get to the end goal here. And so tell me about that. Tell me about why you want to renegotiated

USMCA. Kuzma, you don't want it scrapped from your perspective. You know, I represent Florida tomatoes. You know, they're the largest fresh tomato industry in the United States. We grow winter, early spring into early June, which is exactly when Mexico imports food, you know, imports tomatoes into the market at prices that cannot, I know we cannot compete with. We've seen our market go in 1990. when NAFTA started of having 80% of the marketplace to now, and Mexico having about 20 to 30%, it has totally been reversed. So coming this year, Mexico represents about 70% of the market, U.S. market, and U.S. now represents 30.

That's not an accident. That was done because there was a lot of damage that was done because Mexico was selling at prices below the market, and they were allowed to do that through these transactions. trade agreements. So if I'm hearing you correctly, Robert, your issue is with the Mexico-U-S relationship when it comes to Kuzma. Is that right? Yeah, I think that's very right. Canada is not our adversary in this debate. Canada is our customer. Florida tomatoes have a loyal following in Canada grocery stores. Your consumers have bought Florida Field grown tomatoes for decades. We do an annual survey with Canadian consumers each year, and the survey data came back.

this year shows that 63% of Canadian consumers require or recognize the flavor of differences between fieldgrown and greenhouse tomatoes and substantially number of preferred field grown. I mean, that's our customers. That's how we grow our tomatoes. The demand is there. The question is, you know, what we're dealing with, though, is really more of a U.S.-Mexico challenge that we have, not just with tomatoes. I mean, I would say that since 2000, you know, we've seen 580% increase in imports from Mexico to the United States across all fruits and vegetables. And I would say, you know, that's, you know, I appreciate, you know, what Jamie said and the exports are so important. But when you're looking at food supply and when you're looking at the ability for a country to grow and feed their citizens, you know, that's a major issue when we're relying the vast majority of our fruits and vegetables from another country.

And then I would add to this as well that, you know, just in the last two or three years, actually last month, you know, the Canadians created a first ever national food security strategy, you know, backed by $3 billion in investments over 10 years. You know, it's aimed at the curb corporate grocery concentration, reduced reliance on foreign food supplies and lower household food. On the other hand, two years ago when President Sightbom from Mexico came into power, she introduced a $4 billion agriculture initiative to strengthen fruit sovereign. and reduce import reliance. Canada and Mexico are already in a position where they don't want to rely on imports. I think our country and our policies and our trade agreements need to be doing the same

for U.S. producers. Explain that more to me because, of course, there's a number of things going on. One is that you cited a survey that Canadians, many of them, prefer the field-grown tomatoes, many of which come from Florida, but we also know there's a sort of, quote-unquote,

movement here in Canada to not buy U.S. Have you felt that pinch, first of all, in the past year? I think we have, certainly. I think, you know, what's interesting is Canada's not an adversary, but we've seen certain tensions between Canada and the U.S. That have impacted the opportunity to bring Florida tomatoes and other fresh produce into Canada. I'll give you one kind of interesting little, you know, little anecdotal story that, you know, we've heard in early 2025 when we were at the of this kind of differences between the U.S. and Canada, Canadian grocery retailers didn't just stop promoting Florida tomatoes. They physically pulled them from the shelves. Some stores put up point

of sales, signs flagging America products as counter-cariff goods. We have been featured for many years in great Canadian grocery as for decades. And, you know, that all went away. That has significantly impacted, you know, our number one market. 95% of our exports go to Canada in terms of tomatoes. And Robert, the other point in one, want to bring up with you is that do you start understand that though the president of the united states has put tariffs on he's put sectoral tariffs on to many of our products uh he has questioned our existence with his 51st state threat so there is this push in this country to become more quote unquote economically independent independent in other ways and i'm just wondering

how that message is resonating with you well i think it's resonating that i wish our country The United States would be a little bit more sensitive to the products that we grow that goes to consumers. You know, I think that, you know, when you look at this, Canada is our customer. And right now the political tensions are costing Florida farmers' sales they were earning, you know, have earned through decades of, you know, growing great tomatoes. You know, you probably know this and are aware of this. You know, we have three to four million Canadians visit and live in Florida during the winter season. That is a built-in market. How do we take that, you know, back to Canada?

How do these consumers take that back when they come back to Canada during the summer, but also demand, you know, more fresh tomatoes from Florida at their restaurants, at their retail? You know, we want to continue this relationship and strong relationship we have with Canada. I appreciate that your business is tomatoes, and that's what you are trying to, you know, to defend, so to speak. But many American companies want the USMCA to continue as is. There are going to be tradeoffs in any kind of trade. great deal. What are you hoping the U.S. administration does? You know, I think we're looking at how can you influence import surges that we see constantly

in tomatoes as well as other fresh produce from Mexico into the United States. As I mentioned, this is not just for tomatoes. This is across, you know, a broad spectrum of fresh produce that's grown in the United States. And I think it's important to look at that because, you know, when Mexico is supplying 58 percent of all fresh fruits and vegetable imports, and roughly two-thirds of tomatoes. Weathered, disease, freight, labor shocks at a single orange river rate through the entire market. So tariffs aren't the biggest issue. It is because we're relying on such a concentrated area of product coming into the United States,

that we need to make sure that our domestic supply of fresh produce, tomatoes, in my case, is maintained. But also, where can it be grown and enhanced? We've seen across the country tomato growers go out of business. basically there's hardly any fresh tomatoes grown in the largest state that grows fresh fruits and vegetables in California. I think that that's really indicative of how we have to look at this more proactively in terms of how to address this fairly and not have this kind of almost one-sided free trade agreement between the U.S. and Mexico. Robert, it's been very good to hear from you as well this morning. We appreciate your time. Thank you.

Okay, thank you. Robert Gunther is the executive director of the Florida tomato. Exchange. He was in Maitland, Florida. And a reminder, we recorded this segment earlier. For more CBC podcasts, go to cBC.ca.ca slash podcasts.