There are concerns among Canadian negotiators that it may not be possible to prevent new U.S. tariffs from being implemented on Wednesday. Ottawa is facing challenges in persuading Washington to alleviate 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., have been briefed on the ongoing negotiations and have been granted confidentiality to discuss the talks candidly.
The negotiations are escalating, with Canada-U.S. Trade Minister Dominic LeBlanc holding another meeting on Sunday afternoon with U.S. Trade Representative Jamieson Greer. This virtual meeting, the third in less than a week, lasted approximately an hour.
Recently, Ottawa’s objective has been to secure a “comprehensive agreement” with Washington.
Canada is aiming for the Trump administration to cancel the impending 50 per cent tariffs, scheduled to come into effect on Wednesday, on nearly $28 billion worth of Canadian goods, representing about five per cent of Canada’s exports to the U.S.
Central to this agreement is the expectation for the Trump administration to reduce existing sectoral tariffs that have been negatively impacting industries such as steel, aluminum, auto, and lumber. Presently, steel and aluminum face 50 per cent tariffs, while autos face tariffs of 25 per cent.
During a speech in Des Moines, Iowa, United States Trade Representative Jamieson Greer highlighted various trade challenges with Canada, emphasizing that any retaliatory actions would not be tolerated by the U.S.
Sources indicate that pursuing a comprehensive two-pronged deal is crucial to gaining provincial support for any agreement, which includes a commitment to reintroduce American alcohol into the market. The Trump administration has made the restoration of U.S. alcohol sales in Canada a non-negotiable aspect of the talks, according to sources.
However, the U.S. has not shown willingness to significantly reduce existing sectoral tariffs, and differences still exist between the two countries on critical unresolved issues, as previously reported by CBC News.
Some provinces are adamant about not lifting their bans on American alcohol unless there is tariff relief for their respective industries from Washington. This stance is creating a dilemma for Ottawa, with sources revealing concerns that a finalized deal might not materialize if provincial opposition persists.