The story: Washington is demanding what amounts to an “entry fee" from Canada in order to engage in the planned review of the Canada-United States-Mexico Agreement (CUSMA) scheduled to start July 1. The demand is vague on specifics, but one of the US's most consistent complaints heading into these talks has been alcohol.
Why it matters: This new demand comes after Canada has already made significant concessions, including dropping many of the reciprocal tariffs it invoked last year and scrapping the digital services tax. The provincial alcohol bans in Ontario and BC are one of the few cards Canada can still play – and it's a real one, given that the Liquor Control Board of Ontario alone is one of the largest purchasers of alcohol in the world. Alcohol or not, if Ottawa is forced to make yet another major concession just to get talks started, it arrives at the table already at a disadvantage. The fact that Washington hasn't specified exactly what it wants makes that risk harder to plan around.
What this means…
- For businesses: PwC says that it’s time to stress-test your CUSMA dependency – basically, identify which parts of your supply chain, contracts, or cost structure depend on tariff-free cross-border movement, and make contingency plans in case trade deadlock continues. Separately, if your company paid tariffs on non-CUSMA goods as the importer of record, you may be eligible for a refund following the US Supreme Court's ruling in February that struck those tariffs down.
- For the alcohol industry: Canadian domestic producers have seen a significant boost in sales since the provincial bans on American alcohol took effect, though some provinces (including Alberta, Saskatchewan and Quebec) have since softened their positions. If lifting the remaining bans becomes part of any concession or renegotiated CUSMA deal, the Canadian companies who benefited most from the boycotts will be the first to feel it.
What’s next: Earlier this week Prime Minister Mark Carney named a broad team to advise on US-Canada trade talks. The 24-member group includes politicians from across the political spectrum, executives from banking, railway, energy, and agricultural sectors, leaders in the auto industry, and one of the largest unions in the country. They'll meet for the first time April 27, which will also be their first real test of whether Canada can present a unified front before formal CUSMA talks begin July 1.
Bottom line: Canada has already ceded significant ground before these talks have even begun, and Washington hasn't said what it actually wants – not publicly, anyway. That ambiguity only gives the US more leverage, so Ottawa should hold on to whatever advantages it has left. That's the situation Janice Charette, Canada's chief trade negotiator, walks into come July 1.
11%
That’s how much entertainment spending rose last year, even as overall spending for Canadians was flat.
What it actually means: According to the Bank of Canada, the high cost of living continues to dampen consumers’ spending plans, and a soft job market has elevated fears of job loss. But entertainment is the one category Canadians are protecting, and we're spending more per transaction too, with the average transaction size up 17%. With uncertainty all around, people are deciding that a little normalcy and escapism is worth the cost.
Follow the money: Anthropic and Amazon snuggle up
The announcement: Amazon will invest $5 billion in Anthropic, deepening a partnership that already totals $13 billion. The deal was struck at a $350 billion valuation, and Anthropic has committed to spending $100 billion on Amazon's cloud technologies and chips over the next decade.
Who benefits: Amazon and its suppliers
The $5-billion investment makes the headlines, but Amazon is locking in a $100-billion customer for its own cloud and chips. The suppliers that build that hardware also saw stocks boosted, with Astera Labs (ALAB) gaining 9% on the day of the announcement. Give it some time, but Amazon is looking like the real winner of this deal.
