The Off-Ramp
Why Carney and Trump may both be walking away from CUSMA — and why Canadians will never agree to be the 51st state
By Bill Cara | April 24, 2026
A year ago, a trade agreement that three countries had negotiated, signed, and ratified — the United States-Mexico-Canada Agreement, which we call CUSMA and the Americans call USMCA — was the bedrock of the North American economy. Today, on the eve of its scheduled review, it is something closer to a carcass. And the people picking at it are no longer just lawyers and trade economists. They are presidents and prime ministers who, I believe, have already quietly concluded that the deal in its current form is not worth saving.
I will go further. I think Mark Carney and Donald Trump are each, for entirely different reasons, preparing an off-ramp out of CUSMA. And I think the Canadian people — whose fingerprints are all over this story, whether Washington wants to admit it or not — have already given Carney the mandate to take that exit. What is about to unfold will shock Americans. It should not. The signals have been in plain view for a year. Washington simply refused to read them.
The numbers Washington cannot explain away
Start with what happened on Wednesday, April 22, in two separate rooms in Washington, and one Bloomberg newsroom filing a story out of Calgary.
In one hearing room, the US Trade Representative, Jamieson Greer, told Congress that there are only two countries that have retaliated economically against the United States in the past year: the People’s Republic of China and Canada. He said an enforcement action against Canada over provincial bans on American wine and spirits may be necessary. He put his closest neighbour and his largest trading partner in the same sentence as the country Washington has spent two administrations treating as its chief strategic adversary. Read that twice. It tells you everything you need to know about how the current US administration sees Canada.
In the other room, Commerce Secretary Howard Lutnick called the Canadian boycott of US spirits “outrageous,” “insulting,” and “disrespectful to America.” This from an administration that has spent a year imposing punitive tariffs on Canadian steel, aluminum, autos, and lumber; that has publicly and repeatedly mused about absorbing Canada as a 51st state; and whose president wrote, in February 2025, that without American subsidies “Canada ceases to exist as a viable country.” The disrespect, apparently, runs only one way.
And in Calgary, Bloomberg broke the story that Alberta is now evaluating three northern British Columbia routes for a new pipeline that would move one million barrels a day of Canadian crude to the Pacific coast — on top of the 890,000 barrels already flowing through Trans Mountain, the majority of which now heads to Chinese refineries rather than American ones.
Those three stories are the same story. They describe a relationship that is being unwound in real time, by mutual disengagement, even as officials on both sides go through the motions of negotiating its renewal.
Carney’s reply was not a negotiating posture. It was a declaration.
On the same afternoon, Prime Minister Carney stood in front of reporters in Ottawa and said two things that deserve more attention than they have received. First, that Canada is not a supplicant. Second, that the United States does not dictate the terms of this negotiation.
Those are not the words of a man who intends to renew CUSMA on the terms Washington is signalling. They are the words of a man who is telling the world, calmly, that the framework is no longer fit for purpose and that Canada will not pay an “entry fee” — as US officials have reportedly demanded — simply to get talks started.
Carney, a former central banker in two G7 nations, does not use words loosely. When he tells the country that our historic strengths based on close ties to America have become weaknesses we must correct, he is not venting. He is describing a strategy. That strategy has three pillars: diversify trade, diversify energy markets, and rebuild domestic resilience. All three are already in motion.
A word about the man at the centre of this
I will be eighty-four this year. I have watched every American administration since Truman. I lived through Joseph McCarthy and the blacklist, through the Cuban Missile Crisis, through the assassination of a president, through Watergate and the only resignation of an American president in history, through Iran-Contra, through the Reagan revolution and the fall of the Berlin Wall, through the Iraq war and the 2008 financial crisis. Across more than seventy years of watching the American republic conduct itself on the world stage, I have come to a conclusion I do not reach lightly, and which I commit to print only because I believe what is about to happen over CUSMA will otherwise take Americans by surprise.
Donald Trump is more dangerous than Richard Nixon. He is more dangerous than Joseph McCarthy. He is, in my considered judgment, the most dangerous politician to emerge from any advanced Western democracy in my lifetime. He simply postures better than the others did — like a reality-television host, which is what he was, and which is how he still governs.
Trump lies. That part is public record, catalogued in the tens of thousands of instances by mainstream fact-checkers across two terms. What distinguishes him from ordinary political dissembling is that the lying is strategic. He is not, in my judgment, a man with poor impulse control who happens to misspeak. He is a purposeful man whose purpose is to destabilize counterparties, collapse the informational ground on which they stand, and extract concessions from the resulting confusion. Most Canadians have arrived at the same conclusion by a different route, and it can be stated more bluntly than I would normally state such a thing: what comes out of his mouth bears no reliable relationship to what he intends to do.
“We don’t need anything Canada has” is not a factual claim. The United States imports roughly sixty percent of its crude oil from Canada, a majority of its potash and uranium from Saskatchewan, firm winter baseload electricity into seven northeastern states from Quebec and Labrador, and the softwood lumber that builds its houses from British Columbia. The statement is not information. It is a move in a negotiation. The 51st-state talk is not a proposal. It is a pressure tactic, applied steadily over the course of a year, intended to damage the Canadian economy badly enough that a broken and demoralized population would accept annexation as a form of relief.
What Trump appears not to have anticipated is that Canadians have been watching him for a decade. We are past flinching. We have read the book. And we have adjusted our behaviour accordingly.
The leverage Washington pretends does not exist
Here is the point that most American commentators — and, apparently, the current US administration — do not grasp.
Canada’s power over the United States is not measured by its share of US GDP, which is around seven percent. It is measured by what Canada controls that America cannot quickly replace. Roughly sixty percent of US crude oil imports come from Canada, running through Gulf Coast refineries specifically configured for heavy sour grades that no other supplier can match at volume. Canadian hydroelectricity — much of it originating at Churchill Falls in Labrador and delivered through long-term contracts running to 2046 and 2051 — is the price-setting firm baseload across seven northeastern US states on the coldest winter nights. A majority of the potash used on American farms comes from Saskatchewan. A majority of the uranium burned in American reactors comes from Saskatchewan. The softwood lumber that frames American houses comes from British Columbia.
None of this can be meaningfully replaced on any timeline shorter than a decade. And Canadian consumers, without instruction from any government, have demonstrated this past year that they will also refuse to buy American wine, American spirits, American travel, and American goods of every kind when they judge the relationship to have been poisoned. The US Wine Institute calls the resulting 78 percent collapse in exports to Canada the worst single-year trade disruption in the history of American wine exports. That is leverage — exercised by forty million ordinary people, one shopping cart at a time, with no government involvement whatsoever. And it is leverage that Washington has spent a year pretending does not exist.
The 51st-state gambit was the tell
Within weeks of the tariff announcements, 1.4 million Canadians had joined Buy Canadian groups. Apps were developed to scan barcodes and identify US-made products. Seventy-five percent of Canadians reported boycotting American goods or services over the past year. More than half cancelled planned travel to the United States. Ninety-one percent told pollsters they wanted Canada to rely less on the US, not more. A Nanos poll earlier this year found that nearly half of Canadians now consider the United States, outright, an untrustworthy ally.
American wine exports to Canada fell 78 percent in a single year. Spirits fell 85 percent in one quarter. Brown-Forman, the owner of Jack Daniel’s, reported Canadian sales down more than 60 percent. None of this happened because Ottawa ordered it. It happened because Canadians, on their own, decided that a neighbour who mused openly about absorbing their country would not be receiving their dollars.
That is not a boycott Washington can negotiate away. It is a generational change in how Canadians see the United States, and it will outlast Donald Trump by decades.
The pipeline is the exit sign
If the alcohol numbers are the symptom, the pipeline is the diagnosis.
Ninety percent of Canadian oil exports have historically flowed south, at a discount of fourteen to eighteen dollars a barrel against West Texas Intermediate, because Canada had no other buyer. The Trans Mountain expansion changed that. In April of last year, for the first time in history, Canada exported more seaborne crude to China than to the United States. The cost advantage American Gulf Coast refineries have relied on for decades began to compress.
A second pipeline of one million barrels a day to Prince Rupert — shorter sailing time to Shanghai than from any US West Coast port — would not just reduce American leverage over Canadian energy. It would end it. Every barrel priced against Brent in an Asian market is a barrel no longer priced against WTI at a North American discount. Carney has said, in plain language, that Canada will become an energy superpower whose resources command global prices. Premier Smith is aiming to submit the project to the federal Major Projects Office by July 1. That is not a date chosen at random. It is the same deadline as the CUSMA review.
Canada is signalling, in the only language Washington actually understands, that we have an alternative.
Trump wants out too — he just wants Americans to blame Canada for it
This is the part most commentators are missing. Donald Trump does not want to renew CUSMA either. CUSMA was negotiated during his first term and once celebrated as his signature trade achievement. He now calls it irrelevant. He has left most of its sectoral tariff regime intact while layering on national-security tariffs that the agreement was specifically designed to prevent. He collects the tariff revenue. He uses it domestically. He has no economic incentive to renew a deal that constrains him.
What he needs is a narrative under which the collapse of CUSMA is Canada’s fault. That is why Greer placed us beside China. That is why Lutnick is shouting about bourbon on liquor store shelves. That is why the administration is demanding upfront concessions on dairy supply management, provincial alcohol policy, the Online Streaming Act, and the Online News Act before negotiations can even begin — concessions that no Canadian government, of any party, could survive granting.
The ask is designed to be refused. Once refused, it becomes the excuse.
What comes after CUSMA
I am not predicting that CUSMA will be formally torn up. Treaties rarely die that cleanly. What I am predicting is that both governments will use the review to walk away from any framework that meaningfully constrains their behaviour, while keeping enough of the architecture in place to avoid a full commercial rupture. Tariffs on autos, steel, aluminum, and lumber will remain. Section 232 will be the new normal. Dispute resolution will be allowed to atrophy. And Canada will quietly redirect its trade, its energy, and its capital toward markets that behave, on the merits, like partners.
The Europeans want our critical minerals. The Asians want our crude and our LNG. India wants our lentils and chickpeas, our potash for their farms, and our uranium for their reactors. Our financial services sector can compete globally when it is allowed to. Our defence industrial base can do considerably more than assemble American components. None of this requires American permission.
What it requires is the decision, already visible in Carney’s conduct and in the Canadian public’s behaviour, to stop treating access to the US market as an existential condition and to start treating it as one option among several.
The 51st state answer, for the record
To any American reader who has followed me this far: the annexation idea is dead. It was never alive. It was an insult from the beginning and it landed as one. Canadians across every region, every language group, and every political party have rejected it, and will continue to reject it, because we are a sovereign country with our own institutions, our own traditions, our own Crown, and our own quiet sense of who we are. We do not confuse our kindness for weakness. We are made of harder stuff than Washington appears to understand.
The tragedy is that none of this had to happen. A year ago, the United States had, in Canada, the most reliable ally and trading partner any great power has ever possessed. What Washington has traded that relationship for — a few points of political theatre, a few billion in tariff revenue, a fantasy map — will be remembered, on both sides of the border, as one of the most expensive unforced errors in the postwar history of North American diplomacy.
Carney understands this. Trump, I believe, understands it too. And that is why the two of them are, for opposite reasons, heading for the same door. The shock, when it comes, will not be that the door opens. The shock will be that Americans did not see the two of them walking toward it.
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Bill Cara is a Toronto resident, a US licensed fiduciary investment manager (ret.) and the publisher of billcara.com, home of the Weekly Global Market Navigator, the Cara Playbook, and INSTAT Trend & Momentum. He has been writing on global markets since April 2004 at billcara.com.