In just over a month, North American governments are expected to decide the future of the Canada-U.S.-Mexico Agreement (CUSMA). More likely, they will decide how to decide that future. It’s still not clear to anyone, probably U.S. trade negotiators included, how this first six-year review of CUSMA will play out.
Still, some things are clearer today than they were a few months ago. They include U.S. Democrats’ expectations for that review, their beefs with Mexico and Canada, and what party members like and don’t like about CUSMA’s performance. Around June 1 we will know how closely these positions line up with those of the administration, as the United States Trade Representative is expected to table demands of Mexico and Canada.
Democratic views about CUSMA matter more to Canada and Mexico the longer the review drags on, given the potential for the party to take control of one or both houses in U.S. midterm elections this November. Commonalities with the Trump administration and some Republican positions on CUSMA could even suggest a bipartisan landing zone with Fortress North America characteristics.
The Dems speak up
Over the past two weeks, groups of House and Senate Democrats have sent letters to USTR Jamieson Greer with their positions on the CUSMA review. In the same period, House Representative Rosa DeLauro (D-Connecticut) tabled a resolution “calling for a trade policy that supports workers, consumers, independent farmers, small businesses, and the environment.”
DeLauro announced her resolution on May 14 alongside endorsing labour unions, family farm groups and fair-trade advocates including Public Citizen and Sierra Club. The fair-trade resolution rejects both past U.S. trade policies, which favoured offshoring and a race-to-the-bottom on labour and environmental standards, and Trump’s chaotic, investment-chilling, inflation-inducing trade wars with U.S. allies.
Instead, the congresswoman and allies propose U.S. trade policy should include:
- Strong environmental and worker protections backed by swift and accessible enforcement measures, including facility-specific complaints processes similar to those in CUSMA for Mexican labour violations.
- Stricter rules-of-origin, or minimum U.S. or North American content requirements (e.g., that steel is melted and poured in North America), for products to gain duty-free or low-tariff access to the U.S. market.
- Fair wage guarantees across manufacturing, food processing, call centres, back-office work and other tradeable sectors.
- Enhanced funding for international development assistance tied to strengthening labour rights and standards in trading partner countries.
The resolution also calls for:
- Policy space for domestic preferences (buy local conditions) on public spending and stricter domestic content requirements for qualifying bidders.
- Penalties on offshoring and tax incentives for investing in U.S. production.
- Stronger trade penalties for “industrial espionage, forced technology transfer, and intellectual property (IP) theft.”
- Softer digital trade and IP rules, for example, with respect to pharmaceutical goods, so that governments can contain costs and increase access to medicines.
A lot of this is in line with CCPA and Canadian Trade Justice Network recommendations to the federal government for CUSMA review priorities. Even U.S.-exclusive production tax incentives could have positive spillover effects in Canada and Mexico, as long as the tariffs go down.
But this is the catch. Trump does not want to lower the tariffs. And DeLauro’s resolution calls on the U.S. government to maintain and strengthen the use of Section 232 (national emergency) tariffs “where they support domestic production and good-paying jobs.”
Tariffs are a reasonable way for countries to protect jobs from economically harmful imports, as when the sudden increase in cheap foreign goods threatens the viability of industries you would prefer to keep healthy. The federal government has been slow to respond to such threats to Canada’s furniture manufacturing sector, resulting recently in devastating factory closures.
However, current Section 232 tariffs on Canadian and Mexican metals, automobiles and wood products are more beggar-thy-neighbour than legitimately protective. They are aimed at draining investment—and therefore jobs—out of America’s neighbours. There can’t be anything you would call fair trade with Canada and Mexico while these tariffs are in place.
A few days after DeLauro’s resolution, Democrats on the House Ways and Means Committee sent a letter to USTR Greer with ideas for updating and improving CUSMA. They share the congresswoman’s and coalition’s concerns about offshoring and single out U.S. investment in Mexico as an example of “regulatory or wage arbitrage.” However, the letter speaks of “evaluating” and “clarifying,” rather than “strengthening,” CUSMA’s rules-of-origin, “and to consider updates that may be appropriate as new technologies have matured.”
Reflecting the Ways and Means Committee’s centrality to U.S. trade policymaking, the letter outlines bipartisan (i.e., Trump and Biden administration) concerns with foreign investment in “sensitive” North American industries, noting Mexico’s lack of comparable investment screening measures to those in Canada and the United States.
The CUSMA review presents an “extraordinary opportunity” to enhance regional economic and national security through cooperation on “critical” minerals, the letter adds. Trump’s Section 232 tariffs undermine U.S. credibility, Democrats say, and national security would be better protected from “predatory trading practices” by a common (continental) customs tariff.
This last point is on the Trump administration’s agenda. Deputy USTR Jeffrey Goettman previewed U.S. demands for the review during a May 12 panel discussion at the American Iron and Steel Institute’s (AISI) annual meeting. He said his agency’s goal is to provide the president with options for a “next generation” USMCA that may include “unified tariff borders with Mexico and Canada,” or a common customs zone in trade speak.
Steel, aluminum and automotive goods were cited as examples where a common external tariff would help increase North American content in North American supply chains. Linked to that end, Goettman says the U.S. wants to increase transparency in supply chains to ensure firms are abiding by USMCA rules-of-origin. “We need to have all boats lifted though USMCA, but we need the U.S. boat to get lifted a little faster and higher,” Goettman said, in a segment on Trump’s concern with the U.S.-Mexico trade deficit.
Later that same day, according to Inside U.S. Trade, AISI President Kevin Dempsey said there is support across the industry in all three countries for a unified “melt-and-pour rule of origin” for steel in the North American market, which would penalize imports and potentially lead to greater investment in North American steel production, though the penalties for not meeting those requirements would need to be high to be effective.
In their letter to USTR Greer, the House and Ways Democrats call for stronger environmental protections and enforcement, and improvements to labour enforcement mechanisms in Mexico and forced labour import bans in both Mexico and Canada. They would like trade negotiators to address “Canada’s long-standing allocation of dairy tariff rate quotas, which serve to unfairly deny U.S. dairy producers” of their “meaningful access to the Canadian market,” and to put U.S. wine and spirits back on Canadian shelves.
The final Democratic foray to mention is a letter to USTR Greer from 15 senators including Elizabeth Warren (Massachusetts), Chuck Schumer (New York) and Tammy Baldwin (Wisconsin). Not surprisingly, the group shares House Democrat and U.S. labour concerns with offshoring, perceived lack of progress on Mexican labour reforms and holes in CUSMA-based labour enforcement, and the view that Mexico and Canada “have done little” to enforce the mandatory ban on imports of goods made using forced labour.
However, the senators’ letter is more explicit about the China focus of harmonized North American tariffs and investment screening. They worry that since CUSMA came into force, Chinese investment in Mexico “has more than doubled, while U.S. findings of unfair trade practices by the PRC and Chinese companies have expanded significantly.” This is simply not true or very helpful.
Chinese investment in Mexico collapsed in 2025 due to U.S. market access uncertainty and Mexico’s new tariffs on Chinese imports. The Sheinbaum government has made a very clear choice to pursue a national developmentalist industrial strategy within Fortress North America. Market access in the United States is fundamental to this plan. There are worker-centric reasons to shore up continental supply chains through stricter rules-of-origin without resorting to fearmongering about Chinese investment.
Other legislative trade measures
Alongside the Democratic resolution and letters to the USTR, several recent bills introduced in the U.S. House and Senate also flavour expectations for the CUSMA review.
USMCA Travel and Tourism Resiliency Act: The bipartisan bill introduced in February by senators Catherine Cortez (D-Nevada) and Jerry Moran (R-Kansas) would establish a trinational forum of officials responsible for tourism to discuss and collaborate on all matters affecting travel and tourism in North America. The precipitous drop in Mexican and Canadian travel to the United States in 2025 seems to be the main preoccupation. The body would include representatives from USTR, State, Commerce, Homeland Security (yikes), Interior, Labour and Transportation.
Protecting the USMCA from Harmful Chinese Investment Act: This bipartisan bill from senators Cortez (again, D-Nevada) and David McCormick (R-Pennsylvania) seeks to ensure Canadian and Mexican investment screening policies are similar to those in Section 721 of the Defence Production Act of 1950, and that the three governments coordinate to address “shared threats from investments by non market economy countries.” That category mainly means China and likely does not include the Pentagon, a non-market U.S. agency buying up significant shares in Canada’s critical mineral mines and refineries. Canada already screens investment for national security risk but Mexico has not yet introduced comparable procedures.
Protecting American Streaming and Innovation Act: Congressman Lloyd Smucker (R-Pennsylvania) introduced this bill in March with co-sponsors Greg Steube (R-Florida), Nicole Malliotakis (R-New York), Nathaniel Moran (R-Texas), Mike Kelly (R-Pennsylvania) and Carol Miller (R-West Virginia). The bill, if passed, would obligate the USTR to investigate Canada’s Online Streaming Act under Section 301 of the Trade Act of 1974, a powerful tool used by the U.S. to unilaterally (i.e., without trade dispute settlement) impose tariffs on countries whose policies are found to undermine U.S. corporate interests. Admittedly this is a Republican bill, and Democrats have been much more favourable to policy space in the digital sphere for U.S. trade partners.
Section 232 Public Transparency Act: Senators Gary Peters (D-Michigan) and Susan Collins (R-Maine) jointly introduced this short (one page) bill on May 22. It would amend the Trade Expansion Act of 1962 to require the Secretary of Commerce to publish Section 232 reports no later than 270 days after an investigation was launched or no later than the day a report is sent to the President, with exceptions for classified or proprietary information. The legislation was tabled, says the Democratic senator’s website, “as the Trump Administration has launched a record number of investigations to justify imposing high, sweeping tariffs without releasing the findings of these investigations and providing little transparency or rationale to justify these broad tariffs.”
A red-blue CUSMA review?
There is a lot more going on in U.S. negotiations with Mexico and Canada than these Democratic positions suggest. The Trump administration has security-related demands of Mexico that they are linking to the CUSMA review, while Canada is under pressure to agree to purchase more F-35 fighter jets and reverse-course on Canadian cultural content fees for U.S.-based streaming companies.
But the Democratic Party positions above—some aligned with North American labour union, farmer and civil society organization positions, others basically MAGA-lite—are important for us to consider in Canada for two key reasons.
First, it is likely the CUSMA review will drag on past November’s midterm elections in the U.S., which are expected (not guaranteed) to increase Democrat-held seats in Congress and the Senate. Though the Trump administration may wish to avoid adjustments to the North American trade deal requiring congressional approval, control of either house will give the Democrats some leverage over the direction of U.S.-Canada and U.S.-Mexico talks.
Second, the recently published Democratic positions on CUSMA converge with USTR Greer’s vision for the review on big picture items. There seems to be agreement on Chinese investment in North America, “critical” minerals cooperation, strategic use of Section 232 national security tariffs, and an embrace of managed (versus free) trade in sectors where U.S. producers have any footprint.
Combine bipartisan alignment on trade with increased Democratic party influence shortly into the CUSMA review period and a picture emerges of a plausibly stable U.S. vision and demand for the future of North American trade. It is a Fortress North America–type vision with more emphasis in the Democratic version on worker rights and livelihoods but a heavy dose of America First industrial policy.
Canada and Mexico will have to decide how much more integration of external tariffs and investment screening measures they are willing to tolerate to secure trade peace with Trump. When to make that call is just as important. It’s possible President Trump will go against the grain in a mega-deal with China that opens, rather than further restricts, the U.S. market to more Chinese investment in manufacturing, including electric vehicles.
We’ll soon see what happens, as Trump is fond of saying.
