Concerns are rising among Canadian negotiators about the potential imposition of new U.S. tariffs on Wednesday. Ottawa is facing challenges in securing relief from existing sectoral tariffs and convincing provinces to lift restrictions on American alcohol, according to sources familiar with the matter.
Multiple sources, both in Canada and the U.S., who have been briefed on the ongoing negotiations have shed light on the situation. They have been given confidentiality to speak candidly about the talks.
The negotiations are escalating, with Canada’s Trade Minister Dominic LeBlanc meeting virtually with U.S. Trade Representative Jamieson Greer for the third time in less than a week on Sunday. The discussions are intensifying as both sides aim for a “comprehensive agreement.”
Ottawa’s objective in recent weeks has been to reach a deal with Washington that would involve the Trump administration retracting new 50 per cent tariffs set to take effect on nearly $28 billion worth of Canadian goods. This amounts to about five percent of Canada’s exports to the U.S.
The core of this agreement would also involve lowering the existing sectoral tariffs on industries such as steel, aluminum, auto, and lumber, which are currently facing significant tariffs.
During discussions in Des Moines, Iowa, United States Trade Representative Jamieson Greer emphasized the trade challenges with Canada. Greer clarified that the current situation is not a trade war but hinted at potential repercussions if a country retaliates.
Sources indicate that securing a comprehensive agreement, addressing both new and existing tariffs, is crucial to garner provincial support. Provinces are hesitant to lift their bans on American alcohol unless there is substantial relief on tariffs affecting their local industries. The resumption of U.S. alcohol sales in Canada is a key sticking point for the Trump administration in the negotiations.
However, there is a significant gap between the two countries on various unresolved issues, as reported by CBC News on Friday.
Some provinces are holding off on lifting their bans on American alcohol until there is tangible progress on tariffs affecting local industries. This stance is creating challenges for Ottawa, with fears that a final deal may not materialize if provincial opposition persists.
Canada is willing to compromise
Sources reveal that provinces and territories have been informed that Canada may need to make concessions on key issues raised by the Trump administration to reach an agreement. These issues include provincial