Could the Iran war give Canada extra leverage in the CUSMA review?
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Experts say the market disruption caused by the conflict involving Iran could give Canada a slightly stronger negotiating position ahead of the mandatory review of the Canada–United States–Mexico Agreement (CUSMA) scheduled for July.
Rising oil and commodity prices linked to geopolitical tensions have renewed attention on secure and nearby suppliers. In that context, Canada may appear increasingly valuable to the United States as a stable source of energy, critical minerals and geographically close supply chains within North America.
U.S. Ambassador to Canada Pete Hoekstra recently said Washington wants to renew the trade agreement but acknowledged that negotiations with Ottawa are facing “headwinds” as the review date approaches. He also suggested that cooperation between the two countries could deepen in areas such as energy and critical minerals.
Some analysts argue that higher oil prices and global supply chain disruptions strengthen Canada’s argument that its partnership is essential to North American supply security, especially at a time when stable energy sources are gaining strategic importance.
However, Canada’s leverage also has limits. Oil producers say it would be difficult to significantly increase production in the short term because Canada is already operating near high production and export levels, while infrastructure constraints remain a factor.
At the same time, signals from Washington suggest the CUSMA review may involve significant negotiations. U.S. officials have called for reducing non-tariff barriers and improving market access conditions, indicating that the talks could involve pressure from both sides.
In the end, the Iran conflict may not automatically give Canada a decisive advantage in CUSMA negotiations, but it could strengthen Ottawa’s argument at a time when energy security, minerals and reliable supply chains are becoming central to trade policy.
