This article originally appeared in the Financial Post. Below is an excerpt from the article.
By Jack Mintz, February 6, 2026
In the past several months, both United States and Canadian business organizations have called for renewing the Canada-U.S.-Mexico (CUSMA) trade agreement, which is up for review July 1 this year. Businesses want to go ahead with what they are good at — making investments and hiring people to earn profits for investors.
Trade policy uncertainty (TPU) plays havoc with investment. Businesses wait to make irreversible investments rather than charge full steam ahead into possibly losing a fortune. Recent studies show that investment and GDP fall with TPU even if, rather than wait, some firms do go ahead and invest in new technologies or markets. These studies also show that a low tariff, though not as good as free trade, would be better than continuing uncertainty.
Donald Trump’s on-again, off-again tariffs are of course the main source of TPU these days. Trump believes his tariffs have worked. Though they have not brought the recession and inflation that were widely predicted, like any tax, they do hurt the economy. The administration has made clear they’re staying, however, and for three reasons: revenue (US$287 billion in 2025); reindustrialization, as they draw in investments from other countries; and leverage, as they help open up other countries’ economies and reduce the U.S. trade deficit.
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Jack Mintz is the President’s Fellow at the University of Calgary’s school of public policy and a distinguished fellow at the Macdonald-Laurier Institute.
