There is concern among some Canadian negotiators that it may not be possible to prevent new U.S. tariffs from being imposed on Wednesday. Ottawa is facing challenges in seeking relief from Washington on existing sectoral tariffs while also working to convince provinces to lift restrictions on American alcohol, according to sources familiar with the matter.
Multiple sources, from both Canada and the U.S., who have been briefed directly on the negotiations under confidentiality, have revealed that the talks are ongoing and gaining intensity. Canada’s Trade Minister Dominic LeBlanc recently met virtually with U.S. Trade Representative Jamieson Greer for the third time in less than a week.
The objective for Ottawa in recent weeks has been to secure a “comprehensive agreement” with Washington. This includes urging the Trump administration to retract the new 50 percent tariffs scheduled to come into effect this week on nearly $28 billion worth of Canadian goods, which represent around five percent of Canada’s exports to the U.S.
Central to this potential deal is also a provision for the Trump administration to reduce the existing punitive sectoral tariffs affecting the steel, aluminum, auto, and lumber industries. Presently, steel and aluminum face 50 percent tariffs, while the auto sector is subject to 25 percent tariffs.
During a speech in Des Moines, Iowa, U.S. Trade Representative Jamieson Greer emphasized the longstanding trade challenges with Canada, clarifying that the current situation is not a trade war but stating that any retaliation will not be tolerated.
Sources indicate that reaching a comprehensive two-part deal is crucial to garnering provincial support for any agreement, which includes a commitment to reintroduce American alcohol sales. Allegedly, the Trump administration has made reinstating U.S. alcohol sales in Canada a non-negotiable aspect of the talks.
However, the U.S. has not shown willingness to significantly reduce existing sectoral tariffs, and there are substantial gaps between the two countries on critical unresolved matters, as highlighted in a recent report by CBC News.
Some provinces are adamant about maintaining their bans on American alcohol until they receive tariff relief that addresses their local industries. This stance is creating a dilemma for Ottawa, with sources suggesting that finalizing a deal might be impeded if provincial opposition persists.
Canada ready to compromise
It has been communicated to provinces and territories that Canada may need to