Opinion: Pursuing 'Fortress North America' as a supplement to CUSMA renewal is a dangerous mistake  

In Fortress North America, would there be any doubt which party would seek to dominate the tariff setting process — perhaps exclusively? writes Stuart Culbertson. Above: U.S. Trade Representative Jamieson Greer in an April 2025 file photo testifying before the U.S. Senate Finance Committee on President Trump's trade policy agenda. Photo by Kayla Bartkowski /Getty Images

Article content

A nation anxiously awaits the raising of the curtain on the epic drama of the Canada -U.S.-Mexico Trade Agreement (CUSMA). It is now clear that the CUSMA renewal deadline of July 1 has come and gone, with the U.S. rejection of a 16-year extension. However, the path forward remains far from clear. Although the curtains are still tightly drawn, some hot-mic whispers, trial balloon musings and fortune-teller rhetoric are beginning to trickle out into the theatre.

Article content

Article content

One musing that merits our serious attention sees CUSMA partners going beyond a trilateral free trade agreement to strike a customs union — one that would see free trade among the three partners supplemented by an agreement to apply common tariff rates and trade measures on third parties seeking entry into the North American market. This model has now been dubbed in some quarters as “Fortress North America.” It certainly merits consideration and, for Canada’s part, avoidance.

Article content

Article content

Article content

The Fortress North America model has been raised by both Canadian and American leaders. Ontario Premier Doug Ford has been pitching the idea to U.S. audiences using the example of Canada’s divergence from U.S. policy on the importation of Chinese electric vehicles. In his “Can-Am” plan, Ford proposes that “any CUSMA member should match or exceed U.S. tariffs on Chinese electric vehicles and other strategically important products, or lose its seat at the table.” In a recent analysis of this strategy published by the Institute for Research on Public Policy, professor Joel Baum notes, “That sentence was written by Canadians. It will be quoted back to them.”

Article content

Article content

So why should we worry about Fortress North America?

Article content

Firstly, a customs union founded on common external tariffs begs the question: Who sets the tariff rates? In perhaps the most familiar example, the European Common Market (now European Union) was able to build its customs union on a balance of power among its members on top of a commitment to international trade rules under the General Agreement on Tariffs and Trade (now the World Trade Organization). First France and Germany, then joined by Italy, Spain and, for a brief and shining moment, the United Kingdom represented a decent balance of economic power among its players.

Article content

However, in Fortress North America, would there be any doubt which party would seek to dominate the tariff-setting process — perhaps exclusively? In the current trade policy environment in the U.S., one could reasonably anticipate demands to set common tariff rates at U.S. levels. These would be, for the most part, higher than the current rates Canada applies to third party imports.

Article content

In addition to common external tariff rates, the U.S. would no doubt seek to close perceived “back doors” through which countries like China could gain free access to North American markets by meeting rules of origin tests in minimal manufacturing and assembly platforms in, say, Mexico. Or, say, Canada — if the U.S. sees a similar back door in our automotive sector in the form of current manufacturing presence by Japanese automakers. After all, Toyota and Honda, Canada’s top two automobile manufacturers by production volume, operate large, North American-scale facilities in southern Ontario that are essentially based on open access to the U.S. market. Such scenarios would see Canada and Mexico increasingly forfeit trade policy independence to their U.S. partner.