In 1961, the 35th President of the United States famously said, “Let us never negotiate out of fear. But let us never fear to negotiate.”
At the time, John Fitzgerald Kennedy was warning against making concessions or backing down to the Soviet Union out of intimidation but at the same time emphasized that the United States would remain open to diplomacy to avoid nuclear devastation.
Canada and Mexico should heed JFK’s words as they begin the laborious and bound to be frustrating task of “negotiating” the current Canada-United States-Mexico Agreement (CUSMA) with the 47th U.S. President, Donald J. Trump.
Here at home, the trade relationship between Canada and the United States is entering one of its most politically sensitive periods since the original NAFTA (North America Free Trade Agreement) negotiations of the late 1980s. The current CUSMA trade framework is facing a mandatory six-year review process that kicked off on ironically, Canada Day, July 1, 2026.
While the agreement itself is not automatically expiring in July, all three member countries must decide whether to extend it for another 16-year term or move to annual review periods that could eventually lead to termination.
The negotiations are unfolding during a period of heightened economic nationalism in Washington under President Donald Trump’s second administration. Since early 2025, the United States has imposed several tariffs affecting Canadian industries, including steel, aluminum and automobiles. Canada responded with retaliatory tariffs targeting select American products, while maintaining pressure for sector exemptions and broader trade stability.
Photo by Daniel Torok — White House.
At present, formal trilateral negotiations have not fully begun. Canadian officials continue to publicly state that they are ready to negotiate, though several reports indicate that substantive discussions between Canada and the United States have remained limited.
For now, Canadian seafood has been left relatively unscathed — remaining, for the most part, tariff free under CUSMA.
The Canadian seafood industry is one of the country’s most important export sectors, contributing billions of dollars annually to the national economy and supporting thousands of jobs in coastal communities.
Canada is a major producer of lobster, crab, shrimp, salmon, scallops and other seafood products, with much of its production destined for international markets. Among these markets, the United States remains Canada’s largest trading partner.
CUSMA, which replaced the North American Free Trade Agreement (NAFTA) in 2020, has played a crucial role in maintaining stable and tariff-free access to the North American market. Trump has repeatedly raised questions regarding the consequences of either renegotiating or cancelling the agreement altogether. Such changes could significantly affect the Canadian seafood industry, influencing trade flows, competitiveness, employment, investment and long-term economic growth.
One of the most immediate effects of a renegotiated or cancelled CUSMA would be the potential introduction of tariffs on seafood exports.
Under the current agreement, most seafood products move between Canada and the United States without tariffs. This arrangement enables Canadian exporters to compete effectively with domestic American producers and suppliers from other countries. If CUSMA was cancelled and no replacement agreement was negotiated, seafood trade could revert to World Trade Organization (WTO) tariff schedules. These WTO average applied seafood tariffs are typically eight to 10 per cent globally, though some regions apply higher rates to discourage processed imports.
Even modest tariffs of 10 per cent or less could increase costs for American importers, potentially reducing demand for Canadian seafood products. As a result, Canadian exporters might experience declining sales and reduced profit margins.
The lobster industry is an example of this vulnerability.
Any trade barriers introduced through the cancellation of CUSMA could make Canadian lobster more expensive in U.S. markets. American buyers might seek alternative suppliers or increase purchases from domestic fisheries.
Beyond tariffs, CUSMA renegotiations could introduce new regulatory requirements that increase the cost of doing business. This is something that has not been discussed publicly in any great length.
Trade agreements often include provisions related to food safety, environmental standards, labeling requirements, customs procedures and dispute resolution mechanisms. Increased paperwork, inspections, or certification requirements could slow exports and reduce efficiency throughout the supply chain.
Another significant concern right now involves market uncertainty.
Businesses generally prefer predictable trade environments because long-term investments depend on stable access to customers and markets. If the future of CUSMA becomes uncertain during negotiations, seafood companies may delay investments in vessels, processing facilities, cold storage infrastructure, and technological improvements. Investors may also become more cautious about financing expansion projects. This hesitation could limit innovation and reduce the industry’s ability to remain competitive in an increasingly global seafood market.
It appears yet again that the Canadian seafood industry will be observing these negotiations with bated breath as talks take place.
The only predictable thing about Trump’s negotiation style is the unpredictability, so there is bound to be a plethora of obstacles, threats and rhetoric coming from the White House as these trade talks evolve.
Given the seafood industry’s importance to Canada’s economy and coastal communities, policymakers, industry leaders and stakeholders will need to carefully monitor developments and prepare strategies to adapt to any changes that emerge from the 2026 review process.
The future success of the Canadian seafood sector will depend not only on the outcome of CUSMA negotiations but also on the industry’s ability to innovate, diversify, and remain competitive in a rapidly evolving global marketplace.
