Canadian business leader warns trade uncertainty risks 'capital chill' as USMCA talks drag on

• Nearly 68% of Canadian exports go to the U.S., with roughly 80% moving duty-free under USMCA exemptions, making trade uncertainty particularly damaging to investment decisions
• Canada is pursuing a 'U.S. Plus' diversification strategy, targeting 1 trillion Canadian dollars in investment over five years while strengthening ties with Europe, its second-largest trading partner
• Hyder argues all three North American countries should work together on energy, critical minerals, and supply chains rather than pursuing bilateral deals, stating 'all roads point to a merger' trilaterally

Summary: Canadian Business Leader Warns of Investment "Capital Chill" Amid USMCA Uncertainty

Goldy Hyder, CEO of the Business Council of Canada, warns that ongoing trade uncertainty could trigger a "capital chill" across North America, potentially dampening investment as USMCA negotiations remain unresolved. Despite Canada's efforts to diversify trade relationships, Hyder emphasizes the U.S. remains Canada's most critical trading partner.

Key Facts and Figures:

• 68% of Canadian exports go to the U.S., with roughly 80% moving duty-free under USMCA
• Canada targets 1 trillion Canadian dollars in catalyzed investment over five years
• The EU accounts for $178 billion in total trade with Canada (2024), making it the second-largest trading partner
• 13 million U.S. jobs depend on the North American economic partnership

Main Developments:

Washington and Ottawa have exchanged new trade restrictions in recent weeks after negotiations broke down. The U.S. expressed dissatisfaction with USMCA's current form during a July review, continuing negotiations with both Canada and Mexico.

Canadian Prime Minister Mark Carney is pursuing a "U.S. Plus" diversification strategy, strengthening ties with Europe while maintaining U.S. primacy. Focus sectors include energy, mining, technology, and infrastructure.

Market Implications:

Business uncertainty is driving hesitancy in capital allocation decisions. The U.S. Chamber of Commerce, through Neil Herrington, emphasizes the need to restore certainty and eliminate tariffs while maintaining the trilateral framework.

Hyder advocates for deeper North American cooperation in energy, nuclear power, food security, and critical minerals to strengthen regional supply chains. He stresses that all three nations should compete collectively against global rivals rather than fragmenting the partnership.