What If There Is No Canada-US Trade Deal? Here's What You Should Do

Published: July 25, 2025 | Shannon Peel, MarketAPeel

https://www.youtube.com/watch?v=ETPy90Bl088

With one week until the August 1st deadline, both Carney and Trump have signalled that a comprehensive Canada-US trade deal is unlikely to materialize in time. Trump told reporters outside the White House that Canada "could be one where there's just a tariff, not really a negotiation." Carney, for his part, has said he will only accept a fair deal — and has been clear that no deal is better than a bad one.

So what does no deal actually mean for your business? And what should you be doing right now?

The answer depends entirely on which category your business falls into. Let's break it down.

If Your Business Is CUSMA-Compliant, You Are OK

But You Cannot Be Complacent

Here is the most important thing to understand about the current situation: approximately 75 to 86% of Canadian exports to the US qualify for tariff-free status under CUSMA, the trade agreement Trump himself signed in his first term. According to CBC's analysis published this week, around 86% of the value of Canada's exports to the US have the potential to qualify for that exemption giving Canada what University of Ottawa trade law professor Wolfgang Alschner called "a huge comparative advantage" over the rest of the world, which faces broad-based tariffs on nearly all exports to the US.

If your business falls under CUSMA, you are operating closer to normal

But here is the critical caveat: CUSMA is up for renegotiation in one year. The framework that is protecting the majority of Canadian exporters right now has a clock on it. That means you have approximately 12 months to do something most CUSMA-compliant businesses have not done yet, diversify your customer base so that your survival is not dependent on a single trade relationship because a Canada - US Trade Deal is not guaranteed.

The tool to start with is Export Navigator. It is a free federal service that helps Canadian businesses identify export opportunities in Europe, Asia, and beyond. If you have never used it, now is the time.

The Hardest-Hit Sectors And What Is Being Done

The industries feeling the sharpest pain right now are the ones Trump has deliberately targeted, regardless of CUSMA compliance.

Steel and aluminum are facing 50% tariffs across the board. Lumber carries significant additional levies. Automotive was hit with a 25% tariff on non-US content and this one is particularly brutal because of how deeply integrated the supply chain is. As Carney himself noted this week, the average car crosses the Canada-US border up to eight times during production. Canadian-made vehicles and parts that were once a continental supply chain strength have become a serious vulnerability.

The auto sector numbers tell the story directly: more than 90% of Canadian-made vehicles and 60% of Canadian-made auto parts are exported to the US. That level of single-market dependency was always a risk, tariffs just made the risk visible and immediate.

Carney has been working to open new markets for Canadian auto exports in Europe and elsewhere, and there is federal government support specifically structured to help the auto sector adapt. But the structural shift needed here is significant and will take time.

Hero Action vs. Victim Mentality

Something that I am seeing in the market, because it matters more than any policy update.

Certain businesses in the tariff-affected sectors are taking action, finding new customers in Canada, reaching out to export markets, restructuring their supply chains, applying for government programs. Others are waiting. Hoping the August 1st negotiations produce something. Hoping the political situation changes. Feeling powerless.

Waiting is a strategy, but it is a strategy with a predictable outcome.

The government support is real and it is there. At the federal level, programs exist specifically to help Canadian businesses build manufacturing capacity for products currently imported from the US, particularly in steel, aluminum, and other industrial inputs. The BDC has loan programs. Community Futures organizations offer financing in communities across the country. There are nonprofit business support programs in virtually every province.

Steel I-beams and rebar are not manufactured in Canada. Aluminum cans are fabricated in the US from Canadian aluminum and shipped back. These are not obscure products, they are fundamental inputs for construction and consumer goods. If you are an entrepreneur or manufacturer who sees the gap, the government support to close it is currently available. The window for that support is open now, while the political will to fund Canadian manufacturing alternatives is at a peak.

The Retaliatory Tariff Question - Canada-US Trade Deal

A lot of Canadians want to see harder retaliation, turn off the oil, turn off the electricity, match tariff for tariff. I understand the feeling. There is something deeply satisfying about the idea of making the economic consequence visible in a single decisive moment.

But this is Trump. The pattern is clear: hit him, and he hits back harder, and he does not care as much about the economic damage to the US as he says he does. Aggressive retaliation risks provoking an escalation that hurts Canadian workers more than American ones, at least in the short term, because the Canadian economy is more dependent on the cross-border relationship than the US economy is.

The more effective play, the one that is already working, is quieter and more sustained.

Buy Canadian Is Working

The data is starting to come in on the Buy Canadian movement, and it is more significant than most people realize.

According to RSM Canada's economic analysis, the increased awareness of domestic options among both households and businesses has the potential to create sustained behavioural change, not just a momentary reaction. Businesses and all levels of government are actively pursuing Canadian vendors for procurement. Interprovincial trade barriers are being removed at an accelerating pace.

The travel numbers are particularly striking. Canada's Bank of Canada survey data shows Canadians have already taken close to 10 million fewer trips to the US than in 2024. Vermont credit card data showed a 47% drop in Canadian spending. US spirits exports to Canada fell 85% in Q2 2025 compared to the same period last year, below $10 million US for the quarter.

These are not symbolic gestures. These are real economic shifts that are being felt in border states.

And domestically, the flip side of that shift is investment in Canadian tourism, Canadian suppliers, and Canadian goods. Domestic travel spending rose meaningfully in Q2 2025 as Canadians redirected vacation dollars home. That money is circulating in Canadian communities rather than leaving the country.

If you are a business owner who serves Canadians directly, the Buy Canadian momentum is a genuine opportunity. The consumer appetite for Canadian alternatives is higher than it has been in a generation.

What "Polite and Move On" Means

My position is this: Canada should stop waiting for August 1st to tell us something we already know. CUSMA protects the majority of Canadian trade. The sectors that are being targeted by US tariffs need to adapt, not wait. And Canada has a stronger hand at the table than the negotiations narrative suggests, because the US is going to need Canadian critical minerals, energy, steel, and agricultural inputs to build the factories Trump keeps talking about.

The US can theoretically source those things from China or Russia, but that introduces supply chain complexity and political risk that American manufacturers will not want. Canada is next door, politically stable, already integrated, and resource-rich.

That is leverage. And Canada should use it, not by threatening to turn off the lights, but by calmly pursuing deals with Europe, Asia, and other markets; investing in domestic manufacturing capacity; and letting the US market figure out what it costs to replace Canadian supply.

The best version of this moment for Canada is not a retaliatory tariff war. It is a year from now, with a more diversified export base, a stronger domestic market, and a cleaner position walking into CUSMA renegotiations because a Canada - US Trade Deal is not guaranteed.

That future is available. But it requires action now, not in August.

What you can do this week - Canada-US Trade Deal

If you are CUSMA-compliant, contact Export Navigator and start a conversation about diversifying your customer base into at least one new international market.

If you are in a tariff-affected sector, find out which federal and provincial programs apply to your situation. The BDC, Community Futures, and your provincial economic development office are all starting points.

If you are a consumer, Buy Canadian. Not as a political statement, as an economic one. The money you spend in Canada circulates in Canada.

And if you want to talk through the opportunities specific to your situation, visit

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*Shannon Peel is the founder of MarketAPeel and a Narrative Strategist who helps Canadian businesses and professionals read economic signals and find opportunity in uncertain markets. She publishes weekly video analysis on Canadian trade, business resilience, and positioning strategy.