North American Trade Outlook
Industry Insider Predicts US Concessions in Crucial CUSMA Trade Negotiations
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Manufacturing industry insider Falak Kothari says the U.S. will come back to the table on CUSMA — and that a deal is closer than it looks. According to The Province, Kothari argues that North American manufacturing is so deeply integrated that all three countries — the U.S., Canada, and Mexico — have strong reasons to keep the agreement alive.
CUSMA, known as USMCA in the United States, governs trade across the continent. Fairview Post reports that Kothari believes the U.S. is currently using the agreement as negotiating leverage — not walking away from it entirely.
North American Supply Chains Are Too Tied Together to Ignore
Kothari's core argument is simple: the three countries are already deeply connected. Factories in Canada, the U.S., and Mexico share parts, workers, and shipping routes. Breaking that up would hurt all three sides. According to The Sudbury Star, Kothari says the North American manufacturing ecosystem is highly integrated, making a clean break economically painful for the U.S. as well.
That shared dependency, Kothari argues, is exactly why the U.S. will eventually return to negotiations. The agreement isn't just a trade deal — it's the backbone of continental production.
U.S. Tariffs Are a Bargaining Chip, Not a Final Answer
Kothari sees current U.S. tariff threats as leverage, not permanent policy. According to The Observer, he argues that the U.S. is signaling what it wants at the negotiating table — and that concessions from both sides are likely once talks restart. Key U.S. pressure points include Canada's dairy sector, food and beverage rules, and automotive rules-of-origin.
Sectoral tariffs on steel, aluminum, and lumber are also on the table. Sault Star notes that Kothari views these targeted tariffs as tools the U.S. will trade away in exchange for wins in other areas.
Canada's Likely Concessions Include Digital Tax and Auto Rules
Kothari points to areas where Canada may give ground. According to Chatham Daily News, these include the digital services tax, automotive rules-of-origin, and supply chain management. Canada already showed flexibility by pausing its digital services tax — a sign, Kothari says, that Ottawa is willing to deal.
Agricultural inputs and energy are also likely discussion points. Fort McMurray Today reports that Kothari believes Canada will make targeted concessions while protecting core issues like national sovereignty and regulatory approvals.
Why Kothari Thinks a Final Deal Still Gets Done
Despite the tension, Kothari is optimistic. According to Pembroke Observer, he believes that when both sides sit down, the economic logic of CUSMA will win out. The agreement, he says, makes North America more competitive against trading blocs like the European Union and China.
The bottom line, per Woodstock Sentinel Review: the U.S. negotiated CUSMA in 2020 because it worked for American manufacturers too. Kothari argues that reality hasn't changed — and Washington will come to the same conclusion again.
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