Tariff Risk and Cross-Border M&A: What Canadian Companies Need to Know Before 2026 CUSMA Review

Jason Grewal | Origin Law Corporation | Trade and M&A
Licensed in British Columbia, New York, and England & Wales
March 2026

Introduction: The New Baseline for Cross-Border Dealmaking

For decades, the Canada-U.S. trade relationship operated on a foundation of relative predictability. Deal teams could structure cross-border transactions with reasonable confidence that the regulatory and tariff environment at signing would resemble the one at closing. That assumption no longer holds. In 2025, tariffs and geopolitics moved from the periphery to the centre of the global M&A landscape,¹ and the reverberations continue to define deal dynamics in 2026.

The numbers tell a striking story. Canadian M&A value rebounded sharply in the first half of 2025, reaching approximately CA$113.7 billion—a nearly 70% year-over-year increase.² But deal volume remained mostly flat, signalling that capital was being deployed selectively into larger, more strategic transactions.² Meanwhile, global M&A deal values reached US$4.3 trillion in 2025, up nearly 40% from 2024, even as overall deal volumes declined by approximately 2%.³ This divergence reflects a market where conviction matters more than volume, and where every transaction must be stress-tested against a volatile policy environment.

Canadian companies now face a convergence of three forces: ongoing tariff volatility across multiple U.S. legal authorities, the landmark February 2026 U.S. Supreme Court ruling striking down IEEPA tariffs,⁴ and the looming July 1 CUSMA joint review—the first activation of the agreement’s sunset clause mechanism.⁵ Together, these forces are fundamentally reshaping how cross-border M&A transactions are structured, negotiated, and executed.

The Current Tariff Landscape: A Multi-Layered Regime

Understanding the current tariff environment requires distinguishing between several overlapping legal authorities, each with its own scope, duration, and vulnerability to legal challenge.

On February 20, 2026, the U.S. Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act (IEEPA) as exceeding presidential authority.⁴ Starting February 24, U.S. Customs and Border Protection stopped collecting the 35% IEEPA tariff on non-CUSMA compliant goods from Canada.⁴ In its place, the Trump administration invoked Section 122 of the 1974 Trade Act, imposing a 10% global tariff that includes Canada.⁶ Critically, Section 122 tariffs are temporary—limited to 150 days without Congressional approval⁶ —creating a defined window of uncertainty that deal teams must now factor into transaction timelines.

CUSMA-compliant goods remain exempt from these new tariffs.⁴ However, the exemption’s value depends entirely on the outcome of the July 2026 review. Canada, for its part, lifted most 25% retaliatory tariffs on CUSMA-compliant U.S. goods as of September 1, 2025, but maintains tariffs on U.S. steel, aluminum, and non-CUSMA compliant vehicles.⁷

Layered on top of this are the sector-specific regimes. Section 232 tariffs remain in force on steel, aluminum, copper products, lumber, and some automotive parts under separate national security authority unaffected by the Supreme Court’s IEEPA ruling.⁸ For Canadian softwood lumber, the picture is particularly stark: combined countervailing duties, anti-dumping duties, and Section 232 tariffs now exceed 45% on many products,⁹ with some producers facing rates approaching 60% when all measures are stacked.¹⁰ These are not theoretical numbers—they are reshaping entire industries.

The CUSMA Review: What Is Actually at Stake

Much of the Canadian media coverage of the July 1, 2026 CUSMA review has framed it as a hard deadline with existential consequences. The legal reality is more nuanced, but the commercial implications are no less significant for deal structuring.

The CUSMA review is a formal mechanism built into Article 34.7 of the agreement—a “sunset clause” that requires the three signatory nations to confirm in writing whether they wish to extend the agreement for another 16 years, until 2042.⁵ If all three parties agree, the agreement continues and the next review is scheduled for 2032.⁵ Importantly, even if the parties do not confirm an extension, CUSMA does not automatically terminate. The agreement remains in force for another 10 years, subject to annual reviews. Any party wishing to withdraw must provide six months’ notice.¹¹

This means that the immediate risk is not the collapse of CUSMA. Rather, the real risk is sustained uncertainty—a prolonged “situationship,” to borrow the metaphor used in Herbert Smith Freehills Kramer’s 2026 Global M&A Outlook¹² —in which the U.S. declines to confirm extension and uses annual reviews as ongoing leverage to extract concessions. The U.S. is expected to use the review as a forum to exert leverage, including by withholding consent to renew, to address trade irritants. Priorities in negotiations with Canada are likely to include automobile rules of origin, agricultural market access, supply management, cultural protections, and digital trade provisions.¹³

Economists have modelled three scenarios for the CUSMA review. In the base case, the deal is renewed with current exemptions sustained. In the adverse scenario, the deal is not renewed, CUSMA remains in effect for 10 years subject to annual reviews, but CUSMA-related tariff exemptions are eliminated as of 2027. In the severe adverse scenario, the U.S. withdraws entirely, leaving Canada facing tariffs of 35% on most goods.¹⁴ In any scenario, the U.S. economy is not dramatically affected, but the adverse and severe adverse scenarios would have an “undisputed negative impact on the Canadian economy.”¹⁴

For dealmakers, the consequence is this: the terms of CUSMA-compliant tariff exemptions could shift materially within months, and transactions signed today may close in a different trade environment. Modelling multiple scenarios into deal economics is no longer optional.

How Companies Are Responding: Strategies in Practice

Operational Relocation and “Tariff Jumping” Acquisitions

The most visible strategic response to tariff pressure has been the physical migration of Canadian production capacity into the United States. This is not a theoretical exercise—it has reshaped the competitive dynamics of entire sectors.

Lumber and Forest Products. The softwood lumber sector provides the most dramatic case study. Canada’s three largest forest products companies—West Fraser, Canfor, and Interfor—now collectively operate more sawmills in the U.S. than in Canada.¹⁵ West Fraser runs 16 sawmills across the southern U.S. compared to 13 in Canada.¹⁶ Canfor operates 11 mills in Georgia, North Carolina, Mississippi, and neighbouring states.¹⁶ Interfor manages 13 U.S. sawmills, accounting for the majority of its lumber output.¹⁶ Companies with Canadian head offices accounted for 22% of total U.S. lumber capacity, controlling approximately 35% of sawmill capacity in the U.S. South specifically.¹⁷

This migration accelerated as combined U.S. duties on Canadian softwood climbed beyond 35%,⁹ and it has only intensified since the imposition of Section 232 lumber tariffs in late 2025.⁸ Production from U.S.-based sawmills—including those owned by Canadian companies—is exempt from lumber tariffs.¹⁷ The economic logic is straightforward: by acquiring or building U.S. capacity, Canadian companies avoid the tariff entirely while maintaining access to the world’s largest construction market. Canada currently fulfils approximately 25% of U.S. lumber demand, down from 35% in the 1990s.¹⁸

Canfor’s strategic pivot is illustrative. After closing facilities at Estill and Darlington in South Carolina, the company acquired three Swedish sawmills from Karl Hedin, recalibrating its operating mix to approximately 35% U.S. South, 35% Sweden, and 30% Western Canada.¹⁹ This geographic diversification explicitly reduces reliance on tariff-exposed Canadian production. Meanwhile, British Columbia’s allowable annual cut has fallen by one-third over the past two decades due to wildfire losses, insect infestations, and Indigenous rights settlements, and harvest levels have dropped by approximately 50%.²⁰ This structural timber supply decline has left many older BC sawmills uneconomic,²⁰ compounding the strategic case for southern U.S. investment.

Under the proposed new duty rates from the U.S. Department of Commerce’s administrative review, Vancouver-based Canfor faced total levies of 46.48% (up from 16.58%), while West Fraser faced total duties of 26.05% (up from 11.89%).¹⁰ Since 2017, Canadian producers have paid deposits of more than US$7 billion for U.S. duties. West Fraser alone has paid US$920 million in duties over the past eight years.¹⁰

Automotive and Manufacturing. The automotive sector has seen similar dynamics. Several major manufacturers—including Honda, Hyundai, LVMH, and Samsung—have considered moving manufacturing to the U.S.²¹ Canada announced a $2 billion strategic response fund to support its auto industry,²² but the structural incentive to produce within the U.S. tariff wall remains powerful. Export Development Canada (EDC) economists have noted that companies in the auto sector have “decided to drastically shift their operations in order to mitigate the impact of tariffs,”²³ and Statistics Canada reported that the national unemployment rate reached its highest point in more than four years at 7.1%.²³

Overall, Canadian exports in the third quarter of 2025 were 4% lower than they were before U.S. tariffs were imposed, according to the Bank of Canada.²⁴

Headquarters Relocations. Some companies have contemplated more radical moves. TFI International, the Quebec-based transportation and logistics leader, announced plans to relocate its headquarters to the United States before quickly reversing course after its major shareholder, Caisse de dépôt et placement du Québec, expressed strong opposition.²¹ The episode highlights a tension that many Canadian companies now face: the economic logic of southward migration versus the reputational, political, and shareholder risks of being perceived as abandoning Canada during a trade conflict.

The Counter-Trend: “Buy Canadian” and Domestic Capacity Building

While nearly half of Canadian businesses surveyed by KPMG in early 2025 indicated plans to shift production or investment to the U.S. to mitigate tariffs and maintain market access,²⁵ a countervailing trend has emerged. Some companies are doubling down on Canadian capacity to serve a market increasingly oriented toward domestic sourcing.

The federal government has responded with substantial support measures. Close to 1,500 applications have been received from companies across steel, aluminum, lumber, manufacturing, automotive, and seafood sectors through the Regional Tariff Response Initiative. In the steel sector alone, more than 230 firms have applied, and support is already being delivered, protecting nearly 37,000 Canadian workers.²⁶ Key support measures include $500 million for the BDC Softwood Lumber Guarantee Program, $500 million under the Large Enterprise Tariff Loan facility, the “Build Canada Homes” agency with approximately $700 million in funding prioritising Canadian wood products, a Buy Canadian Policy mandating that federal contracts over $25 million prioritise Canadian materials, and a 50% reduction in interprovincial rail freight rates for steel and lumber beginning in spring 2026.²⁶

Canada has also tightened tariff rate quota levels for steel imports from non-FTA partners from 50% to 20% of 2024 levels, and for non-CUSMA FTA partners from 100% to 75% of 2024 levels.²⁷ Over $100 million has been allocated across two years to support employers with active Work-Sharing agreements, benefiting up to 26,000 workers in affected sectors.²⁶

For M&A practitioners, both trends create opportunity. “Tariff jumping” acquisitions of U.S. assets remain strategically compelling—for many Canadian investors, acquiring U.S. assets offers a way to mitigate tariff exposure, secure downstream access to customers and supply, and insulate operations from future policy shifts² —while the domestic capacity build-out creates consolidation opportunities within Canada as smaller operators struggle with margin compression.

Trade Diversification Through New Agreements

Canada has pursued market diversification with notable urgency. In 2025, the federal government signed a new trade agreement with Indonesia, relaunched negotiations with India, initiated negotiations and signed a new Foreign Investment Promotion and Protection Agreement (FIPA) with the United Arab Emirates, opened consultations on relaunching negotiations with the Mercosur bloc (Argentina, Brazil, Paraguay, Uruguay), and announced intentions to begin negotiations with Thailand.²⁸ Companies should assess whether existing agreements—including CETA with the EU and the CPTPP in the Asia-Pacific—can provide preferential tariff treatment that offsets the loss of U.S. market access.

Tariff Risk as a Core Deal Structuring Variable

For cross-border M&A counsel, the most immediate imperative is ensuring that tariff risk is addressed at every stage of the transaction lifecycle. The era of treating trade policy as background macroeconomic noise is over. As Herbert Smith Freehills Kramer observed, tariff-aware deal architecture is becoming standard, with buyers seeking contractual mechanisms to buffer against policy volatility.²⁹

Due Diligence: Beyond the Target’s Direct Exposure

Tariff diligence in 2026 requires mapping the full upstream and downstream supply chain. The relevant question is not simply whether the target’s products are subject to tariffs, but whether its inputs, suppliers, customers, and distribution channels are exposed to tariff volatility. Buyers are now carrying out deeper diligence on tariff pass-through models and exposure to further U.S. protectionism.²⁹

Critically, CUSMA rules-of-origin compliance must be treated as a first-order diligence item. Does the target’s product actually qualify for CUSMA exemption? If rules of origin are amended as part of the review, does it still qualify? Given that U.S. priorities include tightening automotive rules of origin,¹³ companies in supply-chain-intensive sectors should stress-test their CUSMA compliance against plausible amendment scenarios.

MAC Clauses: Drafting for Tariff Specificity

Material adverse change (MAC) provisions have become the most actively negotiated provision in cross-border deals. MAC clauses typically exclude the buyer’s right to terminate for general economic or market conditions unless the target is disproportionately affected.³⁰ Sellers will naturally argue that tariffs constitute “changes in law” already excluded under standard MAC carve-outs.³¹

That argument remains untested in Canadian courts³² and should not be assumed. The American Bar Association has noted that a similar issue arises with planned treaty amendments, including the upcoming CUSMA renegotiations, which could significantly alter the business landscape for companies operating under its jurisdiction.³³ Instead, buyers and sellers should negotiate tariff-specific MAC provisions with defined financial thresholds—for example, a clause providing that a MAC will occur if tariffs relating to certain goods or jurisdictions are imposed above a specified level, or if the impact of tariffs on the target’s revenues exceeds certain defined financial limits.³³

The “disproportionality” qualifier deserves particular attention. If a tariff carve-out is qualified by a disproportionality exclusion, the question becomes whether the target is disproportionately affected relative to its industry peers.³³ Courts applying such exclusions must consider whether the net change to the target company qualifies as a MAC—a factual inquiry that can be difficult to resolve at speed when a party is seeking to invoke a MAC.³³

Practitioners should note that judicial consideration of MAC termination provisions in the North American courts during the COVID-19 pandemic somewhat favoured buyers, with a small number of cases upholding the buyer’s right to terminate by reason of economic shock.³⁰ However, this trend was not replicated in the English courts, where there remains little judicial authority for a buyer’s right to terminate as a result of a MAC.³⁰ The tariff context presents a distinct challenge: buyers must argue that a new event has occurred or that there is a significant change which was not part of the risk environment at signing—which may be difficult to establish where tariff escalation has been a well-publicised risk throughout the transaction.³⁰

Indemnities, Representations, and Purchase Price Mechanisms

Where MAC clauses address termination risk, indemnities and representations address post-closing economic risk. Buyers should consider seeking specific tariff-related representations and warranties—or at minimum, supplementing traditional representations with language addressing the target’s tariff exposure, compliance with rules of origin, and exposure to pending trade investigations.³¹

One approach is to include a specific line-item indemnity in the acquisition agreement for tariff-related losses. Alternatively, a buyer may incorporate tariff-related language into the more common indemnity for pre-closing taxes, or into tax-related representations and warranties within the scope of general indemnification for breaches. The latter approach may be more favourable in transactions that include a representations and warranties insurance (RWI) policy, as it minimises the likelihood of an exclusion under the policy specifically for a tariff-related indemnity.³¹

However, RWI insurers are taking an increasingly conservative approach to tariff-related risk. Tariff-related exclusions are now common and growing in scope.³⁴ Even where a buyer has conducted detailed diligence, insurers may carve out coverage for losses tied to trade regime shifts.³⁴ Where RWI coverage is limited, buyers should negotiate specific seller indemnities for identified tariff exposures—particularly for large, quantifiable risks such as pending duty reviews or Section 232 investigations.

Earnouts, which are increasingly used to bridge valuation gaps caused by tariff uncertainty, require particular care. If tariff policy shifts post-closing, the earnout metrics may be distorted in ways that neither party intended. Practitioners should consider drafting EBITDA or revenue targets with explicit tariff-adjustment mechanisms that normalise for tariff impacts, ensuring that earnout calculations reflect operational performance rather than trade policy shifts beyond either party’s control.

Purchase price adjustment mechanisms—including holdbacks and escrow arrangements—provide additional flexibility. For targets with material tariff exposure, a closing-date working capital adjustment that accounts for tariff-related inventory cost changes can prevent disputes over the economic handoff at closing.

The Multi-Jurisdictional Dimension

Canadian companies doing cross-border M&A in this environment must think beyond the bilateral Canada-U.S. relationship. Transactions involving advanced manufacturing, semiconductors, AI-adjacent software, and critical minerals face heightened scrutiny from regulators across multiple jurisdictions.²⁹ The Investment Canada Act, CFIUS in the United States, and the UK National Security and Investment (NSI) Act may all apply to a single transaction, each with its own timeline, thresholds, and political sensitivities.

FDI regimes are expanding globally—even buyers from “friendly” jurisdictions face increasing scrutiny. Governments are more frequently “calling in” transactions for review even where they do not meet mandatory notification thresholds.²⁹ In the UK, 2025 saw more transactions being notified voluntarily under the NSI Act where parties anticipated a risk of call-in, with buyers pricing in the timetable and outcome uncertainty inherent in a review.³⁵

The China dimension requires specific attention. CUSMA contains a clause restricting signatories from pursuing trade negotiations with “non-market economies” (i.e., China) without informing the other parties.³⁶ The U.S. may seek to further curtail Chinese foreign direct investment in North America through the review process.³⁶ Canadian companies with Chinese investors, supply chain dependencies, or data flows should assess their exposure. On January 2, 2026, President Trump ordered the divestiture of digital chip businesses acquired by HieFo, a Delaware corporation controlled by a PRC citizen, from EMCORE—demonstrating the administration’s willingness to block deals and unwind completed transactions on national security grounds.³⁷

The U.S. Treasury Department has also established its outbound investment security program (OISP), prohibiting or requiring notification regarding certain outbound investments to “covered foreign persons” in sensitive technology sectors.³⁷ Canadian companies with cross-border fund structures or PE investments touching these sectors must assess OISP compliance in addition to traditional FDI review.

Securities Disclosure and Public Company Considerations

For companies listed on Canadian or international exchanges—whether the TSX-V, CSE, or cross-listed on NASDAQ—tariff risk disclosure obligations are heightening. The intersection of rapidly evolving trade policy with material uncertainty about the CUSMA review creates potential disclosure obligations under Canadian continuous disclosure requirements and, for cross-listed issuers, U.S. securities laws.

Issuers should review their risk factor disclosures to ensure they adequately address tariff exposure, CUSMA review uncertainty, and the potential impact of trade policy shifts on their business, financial condition, and operations. MD&A discussions should reflect management’s current assessment of tariff risk, including scenario analysis where material exposure exists. Companies contemplating capital raises—whether through Regulation D and Regulation S offerings or public offerings—should ensure their offering documents reflect the current trade environment with specificity rather than boilerplate.

The SEC has signalled heightened attention to disclosure adequacy, with the 2026 Securities Enforcement Forum noting a perceived trend toward conservative cybersecurity disclosures and, by extension, greater scrutiny of how companies address material policy risks in their filings.³⁸ While this observation arose in the cybersecurity context, the underlying principle—that underreporting material risk carries significant regulatory consequence—applies equally to tariff exposure.

Practical Checklist for Canadian Companies

For Canadian companies contemplating cross-border M&A or capital markets activity in the first half of 2026, the following steps should be considered:

1. Audit CUSMA compliance now. Assess whether the target’s products and supply chain qualify for CUSMA tariff exemptions under current rules—and whether they would still qualify if rules of origin are amended as part of the review.

2. Model multiple tariff scenarios into valuation. Financial models should incorporate at minimum three scenarios: CUSMA renewal with current exemptions; non-renewal with CUSMA remaining in force under annual reviews (with potential loss of exemptions as of 2027); and a severe adverse case involving U.S. withdrawal.¹⁴

3. Draft MAC clauses with tariff-specific thresholds. Move beyond generic “change in law” carve-outs and negotiate defined financial triggers tied to tariff levels and their impact on the target’s revenue or EBITDA.³⁰

4. Negotiate specific tariff indemnities where RWI falls short. Tariff-related exclusions in RWI policies are expanding.³⁴ Identify the gaps and negotiate targeted seller indemnities for quantifiable tariff exposures.

5. Build tariff-adjustment mechanisms into earnouts. Ensure that post-closing performance metrics normalise for tariff impacts to avoid disputes over trade policy shifts beyond either party’s control.

6. Assess multi-jurisdictional FDI filing requirements early. Map the regulatory approvals required under the Investment Canada Act, CFIUS, and other applicable FDI regimes, and build realistic timelines into the transaction schedule.

7. Review securities disclosure for tariff risk adequacy. Risk factors, MD&A, and offering documents should reflect the current trade environment with specificity, not boilerplate.

8. Evaluate operational restructuring options. Consider whether acquiring U.S. assets, diversifying supply chains through CETA or CPTPP markets, or consolidating domestic operations offers a strategic advantage in the current tariff regime.

9. Monitor the CUSMA review timeline closely. Terms agreed—or not—by July 1 will directly affect deal economics. Build flexibility into transaction timelines and consider conditionality tied to the review outcome where appropriate.

Conclusion

Cross-border M&A between Canada and the United States is not retreating—but it is being fundamentally recalibrated. The companies and deal teams that will succeed in this environment are those that treat tariff risk not as an afterthought or a boilerplate risk factor, but as a central variable in structuring, valuation, and execution.

The convergence of the CUSMA review, the post-IEEPA tariff landscape, and the ongoing expansion of sector-specific trade barriers creates both risk and opportunity. Canadian companies that plan early, structure thoughtfully, and execute decisively across jurisdictions will be best positioned to navigate what has become the most consequential period for Canada-U.S. trade in a generation.

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About the Author

Jason Grewal advises on capital markets, investment funds, corporate finance, and cross-border transactions at Origin Law Corporation. Licensed in British Columbia, New York, and England & Wales, he represents issuers, investment funds, and private equity firms on public and private offerings, mergers & acquisitions, and complex corporate reorganizations. He regularly acts on multi-jurisdictional transactions requiring innovative structuring across Canadian, U.S., UK, and EU regulatory frameworks.

Contact: jason@originlaw.ca

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.  

Endnotes

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1. Herbert Smith Freehills Kramer, "Tariffs and M&A | What to Expect in 2026," Global M&A Report 2026, January 14, 2026. Available at: https://www.hsfkramer.com/insights/reports/2026/global-ma-report-2026/tariffs-cause-tension

2. Dentons, "Tariffs, Tech and Turnarounds: Canada-US Cross-Border M&A in 2025," January 29, 2026. Available at: https://www.dentons.com/en/insights/articles/2026/january/29/tariffs-tech-and-turnarounds (citing S&P Capital IQ Pro data).

3. Herbert Smith Freehills Kramer, "Global M&A Overcomes Rocky Early 2025 and Signals Strong Activity in 2026," Mondaq, January 19, 2026. Available at: https://www.mondaq.com/unitedstates/corporate-and-company-law/1732258/global-ma-overcomes-rocky-early-2025-and-signals-strong-activity-in-2026

4. Doane Grant Thornton, "Impact of Tariffs on Canadian Businesses" (updated 2026), reporting on Section 122 of the 1974 Trade Act allowing temporary tariffs of up to 10% for a maximum of 150 days without Congressional approval. Available at: https://www.doanegrantthornton.ca/insights/how-new-tariffs-could-affect-canadian-businesses/

5. Export Development Canada (EDC), "Impact of Canadian Tariffs on U.S. Goods in 2026" (updated February 2026), reporting that as of September 1, 2025, Canada lifted most 25% tariffs on CUSMA-compliant goods but maintained tariffs on steel, aluminum, and non-CUSMA compliant vehicles. Available at: https://www.edc.ca/en/article/how-canadian-tariffs-on-us-goods-may-affect-your-business.html

6. ResourceWise, "U.S. Section 232 Tariffs on Lumber: Navigating the New Trade Landscape," October 1, 2025, reporting on the September 29, 2025 presidential proclamation invoking Section 232 of the Trade Expansion Act of 1962 for timber, lumber, and derivative wood products. Available at: https://www.resourcewise.com/blog/u.s.-section-232-tariffs-on-lumber-navigating-the-new-trade-landscape

7. AJOT, "Canada’s Lumber Industry at a Crossroads: Shrinking Capacity and Challenging Market Diversification," 2026, citing combined anti-dumping, countervailing duty, and Section 232 measures increasing Canadian producers’ costs by an estimated 25–30% and total tariffs exceeding 45%. Available at: https://www.ajot.com/news/canadas-lumber-industry-at-a-crossroads

8. The Globe and Mail, "Canadian Softwood Producers Highlight American Investments as U.S. Probes Lumber Imports," April 25, 2025, reporting Canfor’s proposed total levies of 46.48% (up from 16.58%), West Fraser’s 26.05% (up from 11.89%), and cumulative industry deposits exceeding US$7 billion since 2017. Available at: https://www.theglobeandmail.com/business/article-canadian-softwood-producers-highlight-american-investments-as-us/

9. Canadian Affairs, "The True Worst-Case Scenario for CUSMA Talks," February 6, 2026, quoting Alexander Hobbs (Cassidy Levy Kent) and John Boscariol (McCarthy Tétrault) on the mechanics of Article 34.7, confirming CUSMA remains in force for 10 years even absent confirmation and that withdrawal requires six months’ notice. Available at: https://www.canadianaffairs.news/2026/02/06/the-true-worst-case-scenario-for-cusma-talks/

10. Herbert Smith Freehills Kramer, "Global M&A Outlook 2026," Mondaq, January 16, 2026. Available at: https://www.mondaq.com/unitedstates/corporate-and-company-law/1732054/global-ma-outlook-2026

11. Fasken, "2026 CUSMA Review Consultation," October 2025, reporting that U.S. priorities in negotiations with Canada are likely to include automobile rules of origin, agricultural market access, supply management, cultural protections, and regulatory frameworks. Available at: https://www.fasken.com/en/knowledge/2025/10/2026-cusma-review-consultation

12. Investment Executive, "CUSMA Review Critical to Canada, U.S. Not So Much," February 25, 2026, citing economic modelling of base case, adverse, and severe adverse CUSMA review scenarios. Available at: https://www.investmentexecutive.com/news/cusma-review-critical-to-canada-u-s-not-so-much/

13. Canadian Dimension, "Sawmilling Turncoats," 2025, reporting that West Fraser, Canfor, Interfor, Tolko, and Teal-Jones now collectively operate more sawmills in the U.S. than in Canada. Available at: https://canadiandimension.com/articles/view/sawmilling-turncoats

14. HBS Dealer, "Do Canadian Companies Control Too Much U.S. Lumber?" June 11, 2025, citing MadeInUSA.com reporting: West Fraser operates 16 U.S. sawmills (vs. 13 in Canada), Canfor runs 11 mills in Georgia, North Carolina, Mississippi, and neighbouring states, and Interfor manages 13 U.S. sawmills. Available at: https://hbsdealer.com/do-canadian-companies-control-too-much-us-lumber

15. The Globe and Mail, "West Fraser’s Annual U.S. Lumber Production Surpasses Its Canadian Output," April 18, 2023, citing Forest Economic Advisors data that companies with Canadian head offices accounted for 22% of total U.S. lumber capacity and controlled approximately 35% of sawmill capacity in the U.S. South. Production from U.S.-based sawmills, including those owned by Canadian companies, is exempt from lumber tariffs. Available at: https://www.theglobeandmail.com/business/article-west-fraser-lumber-production-canada-us/

16. Canadian Dimension, supra note 15, reporting that Canada fulfils approximately 25% of American lumber demand, down from 35% in the 1990s.

17. Motley Fool Canada, "Top Canadian Lumber Stocks of 2026," December 8, 2025, reporting on Canfor’s planned acquisition of three Swedish sawmills from Karl Hedin and resulting operating mix of approximately 35% U.S. South, 35% Sweden, and 30% Western Canada. Available at: https://www.fool.ca/investing/top-canadian-lumber-stocks/

18. AJOT, supra note 9, reporting that British Columbia’s allowable annual cut has fallen by one-third over the past 20 years due to timberland set-asides, Indigenous rights settlements, insect infestations, and wildfire losses, and that harvest levels have dropped by approximately half.

19. The Globe and Mail, "Move to the U.S. to Avoid Tariffs? These Canadian Companies Say No Way," April 21, 2025, reporting on Honda, Hyundai, LVMH, and Samsung considering U.S. manufacturing relocation, and TFI International’s headquarters relocation announcement and subsequent reversal. Available at: https://www.theglobeandmail.com/business/article-canadian-companies-expansion-plans-us-tariffs/

20. Doane Grant Thornton, supra note 6, reporting on the $2 billion strategic response fund announced by Prime Minister Carney to support Canada’s auto industry.

21. Export Development Canada (EDC), "FAQs: What Canadian Exporters Need to Know About the Impact of Tariffs" (updated February 2026), quoting EDC senior economist Prince Owusu and citing Statistics Canada unemployment data at 7.1%. Available at: https://www.edc.ca/en/article/tariffs-impact-canada-exporter.html

22. Bank of Canada, "How Canadian Businesses Are Adapting to U.S. Tariffs," Monetary Policy Report, January 28, 2026. Available at: https://www.bankofcanada.ca/publications/mpr/mpr-2026-01-28/in-focus-1/

23. The Globe and Mail, "Canadian Businesses Plan to Shift Investment and Operations to U.S. to Mitigate Potential Tariffs, KPMG Survey Shows," January 29, 2025, citing a KPMG survey of 250 business leaders. Available at: https://www.theglobeandmail.com/business/economy/article-canadian-businesses-plan-to-shift-investment-and-operations-to-us-to/

24. Office of the Prime Minister of Canada, "Prime Minister Carney Announces New Measures to Protect and Transform Canada’s Steel and Lumber Industries," November 26, 2025. Available at: https://www.pm.gc.ca/en/news/news-releases/2025/11/26/prime-minister-carney-announces-new-measures-protect-and-transform

25. Canada, Minister Ali, "New Measures to Protect and Transform Canada’s Steel and Lumber Industries," December 5, 2025, announcing tightened tariff rate quotas for steel imports. Available at: https://www.canada.ca/en/treasury-board-secretariat/news/2025/12/minister-ali-announces-new-measures-to-protect-and-transform-canadas-steel-and-lumber-industries.html

26. Fasken, "Looking Ahead to 2026: A New Era of International Trade," January 2026, reporting on Canada’s new trade agreements and negotiations with Indonesia, India, UAE, Mercosur, and Thailand. Available at: https://www.fasken.com/en/knowledge/2026/01/looking-ahead-to-2026-a-new-era-of-international-trade

27. Herbert Smith Freehills Kramer, supra note 1, reporting on tariff-aware deal architecture, enhanced supply chain diligence, and heightened multi-jurisdictional scrutiny for transactions in sensitive sectors.

28. Norton Rose Fulbright, "Tariff Uncertainty and M&A Deals," 2025, analysing MAC clauses in the tariff context, including COVID-era judicial precedent, the “new event” standard, and proposed tariff-threshold drafting approaches. Available at: https://www.nortonrosefulbright.com/en/knowledge/publications/e0b75101/tariff-uncertainty-and-ma-deals

29. BakerHostetler, "Methods to Allocate Tariff-Related Risks in M&A Agreements," April 17, 2025, discussing tariff-related indemnities, representations and warranties, MAC exclusions, and RWI structuring considerations. Available at: https://www.bakerlaw.com/insights/methods-to-allocate-tariff-related-risks-in-ma-agreements/ (also published on Lexology).

30. The question of whether tariffs can be relied upon to invoke a MAC clause has also not been tested in Australian courts: see Lexology, "Your Guide to Material Adverse Change Clauses Amidst Current Economic Headwinds," June 5, 2025. Available at: https://www.lexology.com/library/detail.aspx?g=41e8887c-b662-4297-a0e2-2eb8db7eeb78

31. American Bar Association, Business Law Section, "Material Adverse Change Clauses in M&A: The Risks of United States-Mexico-Canada Agreement Renegotiation and Tariff Uncertainty," Spring 2025. Available at: https://www.americanbar.org/groups/business_law/resources/newsletters/2025-spring-ma/material-adverse-change-clauses-m-a/

32. IMAA Institute, "M&A Strategies in a Tariff World: How to Navigate Risk, Valuation and Deal Structuring," May 5, 2025, reporting that RWI tariff-related exclusions are now common and growing in scope. Available at: https://imaa-institute.org/blog/m-and-a-in-a-tariff-tinged-world-how-to-navigate-risk-valuation-and-deal-structuring/

33. Herbert Smith Freehills Kramer, supra note 1, reporting on increased voluntary notifications under the UK NSI Act in 2025.

34. RBC Wealth Management, "The Preservation of CUSMA Is Economically Critical to Canada," October 22, 2025, citing CUSMA’s non-market economy clause and implications for Chinese foreign direct investment in North America. Available at: https://www.rbcwealthmanagement.com/en-ca/insights/the-preservation-of-cusma-is-economically-critical-to-canada

35. Morrison & Foerster, "M&A in 2025 and Trends for 2026," January 15, 2026, reporting on the January 2, 2026 presidential order requiring HieFo to divest EMCORE’s digital chip businesses, and the establishment of the Treasury Department’s outbound investment security program (OISP). Available at: https://www.mofo.com/resources/insights/260115-m-a-in-2025-and-trends-for-2026.

36. Mondaq, "Insights from the 2026 Securities Enforcement Forum New York," February 2026, reporting on SEC enforcement trends including conservative cybersecurity disclosures and heightened scrutiny of material risk reporting. Available at: https://www.mondaq.com/unitedstates/securities/1746742/insights-from-the-2026-securities-enforcement-forum-new-york.