Advisors need to watch company behaviour, not just headlines, as the renewal process heats up
The formal review of the Canada-United States-Mexico Agreement may still lie ahead, but Charmaine Goddeeris, Director of Indirect Tax at BDO Canada, tells WP that the uncertainty is already reshaping how businesses operate.
"Even before the formal review begins, many companies are operating in a more complex trade environment, with tariffs and increased scrutiny affecting how goods move across borders," Goddeeris says. "The key issue is whether the review introduces additional costs or complexity for businesses operating within integrated North American supply chains."
For advisors assessing Canadian equities and sector-specific exposure, she identifies clear fault lines.
"The industries most exposed to potential changes in CUSMA are generally those that depend heavily on cross-border trade, including automotive, manufacturing, steel and aluminum, energy, and parts of agriculture. These sectors often rely on integrated supply chains and continued access to the U.S. market."
The best case from a trade standpoint, she suggests, would be limited disruption.
"A favourable outcome would be an extension of the agreement with limited changes, providing businesses with continuity and a framework they already understand. While that may not materially improve trade conditions, it would help avoid additional uncertainty and costs."
Decision making
Tariff volatility is already influencing corporate decision-making, Goddeeris says, with implications for advisors working with business-owner and high-net-worth clients.
"When businesses cannot reliably predict the cost of moving goods across borders, long-term planning becomes more difficult. Some companies are taking a more cautious approach to investment decisions. That may include delaying projects, investing in stages, exploring alternative sourcing options, or building greater flexibility into their operations while trade conditions remain uncertain."
She argues that businesses do not need to wait for a formal outcome before taking action. "A good starting point is ensuring CUSMA compliance by confirming products are properly classified, meet rules of origin requirements, and are supported by appropriate documentation. Businesses should also identify which products, suppliers, or parts of their supply chain could be most affected if trade rules change."
Beyond basic compliance, Goddeeris says proactive planning can go further.
"Companies may benefit from building greater flexibility into their supply chains, reviewing sourcing options, and ensuring customs and tax positions are aligned. Scenario planning can also help businesses understand the potential impact of higher costs or reduced access to preferential treatment. These steps can help organizations remain adaptable regardless of the review's outcome."
Macroeconomics
On the broader macroeconomic picture, she traces how trade costs can ripple outward.
"A more expensive trade environment generally begins with higher costs moving through supply chains. Tariffs, compliance requirements, and other trade-related costs can increase the expense of importing goods and operating across borders. Over time, some of those pressures can extend beyond individual businesses and affect broader supply chains."
For advisors seeking to keep clients grounded during periods of policy noise, Goddeeris cautions against over-reacting to short-term developments.
"It is important to recognise that policy developments do not always translate into immediate or uniform impacts across industries. Trade relationships and supply chains tend to adapt over time, even during periods of uncertainty. It is often helpful to distinguish between short-term policy announcements and longer-term structural changes that may materially affect how businesses operate."
When it comes to monitoring the real-world impact of any CUSMA changes, she points advisors toward the company level rather than top-line economic data. "One of the earliest places meaningful change may become visible is at the company level. Businesses often adjust their operations before broader economic indicators reflect the impact of new trade policies."
The signals worth watching, Goddeeris says, are behavioural.
"I would watch for signs that companies are changing sourcing strategies, restructuring supply chains, facing higher compliance costs, or encountering greater difficulty qualifying for preferential treatment under CUSMA. The key question is whether businesses are changing behaviour in response to trade costs or uncertainty, as that is often one of the clearest signals that policy changes are having a practical impact."
