Concerns are growing among Canadian negotiators that it may be impossible to prevent new U.S. tariffs from being implemented on Wednesday. Ottawa is facing challenges in convincing Washington to lift existing sectoral tariffs while also attempting to negotiate with provinces to remove restrictions on American alcohol, according to sources familiar with the discussions.
Multiple sources, both from Canada and the U.S., who have been briefed on the negotiations have revealed details under the condition of anonymity to speak candidly about the ongoing talks.
Negotiations are escalating, with Canada-U.S. Trade Minister Dominic LeBlanc meeting U.S. Trade Representative Jamieson Greer for the third time in less than a week on Sunday. The latest meeting, conducted virtually, lasted around an hour.
Recently, Ottawa’s objective has been to secure a “comprehensive agreement” with Washington. The Canadian government aims for the Trump administration to retract the impending 50 per cent tariffs on nearly $28 billion worth of Canadian goods scheduled to come into effect on Wednesday, constituting about five per cent of Canada’s exports to the U.S.
Central to this agreement is a provision for the Trump administration to decrease the existing sectoral tariffs impacting industries such as steel, aluminum, autos, and lumber. Presently, steel and aluminum are facing 50 per cent tariffs, while autos are subject to 25 per cent tariffs.
Speaking in Des Moines, Iowa, United States Trade Representative Jamieson Greer said there are ‘a lot of issues’ with Canada, after being asked by a CBC reporter if there were particular areas the two countries couldn’t find agreement on. Greer said that for the U.S., the current situation ‘is not a trade war,’ but if a country retaliates, ‘we’re obviously not going to tolerate that.’
Sources indicate that a comprehensive deal addressing both aspects is crucial to gain provincial support, which includes a commitment to resume selling American alcohol. The Trump administration has made the reinstatement of U.S. alcohol sales in Canada a non-negotiable demand in the ongoing negotiations.
However, the U.S. has not shown willingness to significantly reduce existing sectoral tariffs, resulting in substantial differences between the two countries as reported by CBC News on Friday.