Markets & Main Streets: Here comes USMCA

Review of trade agreement puts spotlight on NH’s relationship with Canada

Taylor Caswell

Next month, the United States, Canada and Mexico begin the formal joint review of the USMCA trade agreement. Under the original agreement, a review is required, and while there is no likely outcome that would result in the dissolving of the agreement, it does allow for updates and changes.

To begin, it’s worth reiterating that New Hampshire’s relationship with Canada is economically significant, and given that we have all been neighbors for generations, longstanding and culturally integrated. Bilateral trade between NH and Canada is valued at $2.75 billion, and there are over 90 Canadian-owned companies operating in NH providing 5,000 jobs. This is the most of any state in northern New England: In Vermont, Canadian companies provide 2,600 jobs, and in Maine the number is 4,750.

There are many critical products that make up the bulk of this trade relationship including aerospace, medical instruments, lumber and steel. But the one that really stands out is energy. The six New England states collectively imported $7.6 billion in fuel oil from Canada in 2024, meaning most cars in the region run on gasoline refined in Canada, and most of the jet fuel at regional airports originates there as well.

But the big one is fuel oil, which alone accounts for $447 million in annual imports into New Hampshire, representing nearly a third of all goods we bring in from Canada. The stakes of that fact are personal and immediate: More than 350,000 New Hampshire households rely on heating oil or propane to keep their homes warm.

Just over a year ago, the second Trump Administration began an economic and cultural assault on Canada. In a series of moves, multiple new tariffs were announced, often adjusted, then most were ultimately deemed illegal by the Supreme Court, and references were made suggesting Canada become the “51st state.” None of this was well received, nor in my view necessary.

The resulting volatility for many New Hampshire businesses has been overwhelming, costly and stressful. Supply relationships were turned upside down, and ability to make sound investment financial decisions were transformed into a gamble. The results included investment decisions being shelved, redesigns of supply chains, and in many cases workforce struggles.

In addition, many Canadian tourists decided not to come to the United States at all. Remember that New Hampshire’s tourism industry employs over 80,000 residents across almost 5,000 businesses, virtually all of which are small businesses. It is the second-largest revenue-generating sector in the state. In 2025, that industry saw an estimated 30% reduction in Canadian travel. State campgrounds reported a 70% reduction in Canadian customers compared to 2024. We saw international visitation at a large drop, but Canadians are 80% of that total alone.

Interestingly, the capital investment and multinational banking crowd is not as concerned. In 2025, investment into Canada reached the highest level since 2007, and U.S. investors alone increased their investments by almost $54 billion. With regard to tourism impacts, one investment bank economist referred to these as “sentimental factors” that won’t last and should be of little concern.

Circling back to USMCA and what’s important for our businesses and officials here in NH: First, despite all our best intentions, we are not going to overcome many of the positions and statements that have been made over the past year that are keeping many Canadian tourists away. We can do our best and hope that comes back before too long, but for now we have to turn our marketing focus more domestically. Look beyond the traditional tourism markets in New England urban centers and aim at convincing our friends in the mid-Atlantic and eastern midwest to join us for a week this year.

Second, protect those energy imports.

New England and New Hampshire are at the end of every pipe and wire, whether it comes from the Gulf of Mexico or eastern Canada. Since we are not in the business of offshore wind anymore, there is no native generation of any scale, which means we must import virtually all of our energy to keep costs down. Since so much of that comes from Canada, that’s a priority.

And lastly, we need to reduce volatility.

Pick a policy and stick to it. We’ve been whip-sawed around between White House announcements, social media posts, Ottawa responses and the Supreme Court. Maybe manageable for global investment markets, but not so great on Main Street.

The economists calling all this “sentimental” aren’t the ones trying to meet equipment orders in Littleton’s industrial park or fill cabins on the shores of Lake Winnipesaukee.

Taylor Caswell has led economic policy agencies on the state and federal level for decades, most recently serving as New Hampshire’s commissioner of business and economic affairs. You can reach him at linkedin.com/in/taylorcaswell.