If U.S. President Donald Trump were to impose tariffs on Canadian goods as he has repeatedly threatened, experts indicate that Canada would have a substantial case to challenge such actions under the Canada-U.S.-Mexico Agreement (CUSMA). However, the speed with which any decision could be made is in question, as well as the likelihood that the U.S. would respect any ruling that may arise from the situation.

Wendy Wagner, a partner at Gowling WLG, expressed concerns regarding the adherence to a "rules-based system" in the context of international agreements. She noted that the efficacy of such systems largely relies on the willingness of governments to comply with their decisions. The CUSMA operates as a nation-to-nation agreement, leaving no higher body to which countries could appeal if one decides to disregard a ruling.

The U.S.'s historical compliance with trade decisions has been inconsistent. Significant disputes have emerged from complex issues, such as determining the foreign content within automobiles or the protracted softwood lumber conflict. However, the tariffs Trump has threatened—specifically a blanket 25 percent on Canadian goods and a separate 10 percent on energy—are clear-cut and devoid of ambiguity, according to Wagner. She labeled such measures as fundamentally contradictory to the essence of free trade agreements.

The clarity of Trump's threatened tariffs raises questions about the potential impact of rulings through treaty channels, Wagner explained. She pointed out a broader issue regarding adherence to a rules-based system, both internationally and domestically. For instance, the U.S. imposed metal tariffs in 2018, which the World Trade Organization ultimately deemed impermissible; however, the U.S. refused to comply with this ruling.

Canada also has the option of challenging the proposed tariffs at the World Trade Organization (WTO) in addition to pursuing action through CUSMA. According to the rules governing the regional treaty, Canada could initiate a complaint that would require mandatory consultations between the involved countries within 30 days of its filing. If this preliminary step does not produce a resolution, the next course of action would involve establishing a dispute settlement panel, which functions as a tribunal hearing arguments and assessing evidence, ultimately leading to a report detailing its findings.

The duration of this grievance process can vary, but past disputes have typically taken between one to one-and-a-half years. The dispute panel's report would outline necessary actions for rectifying the trade issue. Should the U.S. fail to comply with the ruling, Canada would be entitled to implement dollar-for-dollar countermeasures. Although Prime Minister Justin Trudeau has indicated that Canada would retaliate immediately if tariffs are imposed, preemptively imposing counter-tariffs could technically violate the treaty.

Despite the urgency of responding to the potential tariffs, it remains crucial for Canada to adhere to the treaty procedures in order to reach an equivalent resolution, according to Clifford Sosnow, a partner at Fasken Martineau DuMoulin. He emphasized that complying with the grievance process would symbolize Canada's commitment to the importance of the agreement, even if retaliatory measures ultimately revert to the original conflict.

Participating in the legal process also compels the U.S. to engage with and submit to these dispute resolution mechanisms, making it more challenging for the U.S. to renounce the entire treaty, as suggested by Sosnow. A refusal to engage would represent a significant departure from President Trump's stated desire to negotiate a better version of the treaty in the upcoming discussions scheduled for June 1, 2026. He characterized such a refusal as a highly controversial and unprecedented repudiation of the agreement.

A complete dissolution of the treaty would overshadow the implications of Trump's tariffs, which he justifies based on national security concerns, albeit with shaky reasoning. When Trump last imposed tariffs on Canadian steel and aluminum in 2018, the situation was resolved through counter-tariffs and diplomatic negotiations, rather than the treaty framework. Sosnow noted that while previous actions may have placated Trump, his current stance suggests he is not amenable to similar solutions this time.