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Trade peaked near $800B annually under USMCA before the tariff conflict began. The 2025–2026 decline represents both direct trade suppression from tariffs and supply-chain restructuring by firms seeking to reduce cross-border exposure.
THE IRONYUSMCA — the framework governing U.S.–Canada trade — was negotiated by the Trump administration in 2018–2019 to replace NAFTA. The current tariff war represents an administration in conflict with its own prior agreement. Canada's retaliatory tariff strategy is explicitly designed to apply electoral pressure on Republican congressional districts ahead of the November midterms.