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Trade tensions rise ahead of USMCA review
Canadian Prime Minister Mark Carney has dismissed calls for preemptive concessions in upcoming trade negotiations with the United States, as a senior U.S. official warned of deep disagreements between the two nations. The statements come amid uncertainty over the future of the U.S.-Mexico-Canada Agreement (USMCA), with a critical review deadline set for July 1.
U.S. accuses Canada of resisting trade reforms
U.S. Trade Representative Jamieson Greer told Congress on Wednesday that Canada is clinging to globalization policies that Washington seeks to overhaul. "Canada is doubling down on globalization when we're trying to correct for its problems," Greer said, framing the divide as a fundamental obstacle to progress.
Carney, speaking to reporters, rejected the notion that Canada would accept dictated terms. "This isn't a situation where one side makes demands and the other complies," he said. "We're engaged in negotiations, and we can reach a mutually beneficial outcome-it will take time."
Key disputes and missed deadlines
The USMCA, which governs trade between the U.S., Canada, and Mexico, faces a mandatory review by July 1. While Mexico is set to begin formal bilateral talks with the U.S. in May, Canada and the U.S. have yet to schedule negotiations, though officials remain in contact.
Canada has already made concessions, including scrapping a proposed tax on large U.S. tech companies last June after the Trump administration objected. However, Jean Charest, a former Quebec premier and member of Canada's new U.S. trade advisory committee, told Radio-Canada that Washington is seeking "a lot of concessions" before talks even begin.
Dairy and liquor tariffs fuel friction
Greer highlighted several trade irritants, including Canada's decision to pull U.S. liquor from provincial shelves in retaliation for American tariffs. "There are two countries that have retaliated economically against the U.S. in the past year-China and Canada," he said, warning that enforcement actions may follow.
Dairy quotas remain another flashpoint. U.S. Commerce Secretary Howard Lutnick told a Senate committee on Wednesday that Canada treats American dairy farmers unfairly. President Donald Trump previously accused Canada of imposing "extraordinary tariffs" of up to 400% on U.S. dairy products.
Canada's supply-management system, which regulates dairy production and imports, limits tariff-free U.S. dairy imports to a set quota-one that U.S. officials say has never been fully utilized. Dominic LeBlanc, Canada's minister for U.S. trade relations, told the Globe and Mail that dairy is "off the table" but suggested Ottawa has solutions for most U.S. concerns.
Uncertainty over July deadline
Both sides acknowledge that a deal by July is unlikely. Greer told lawmakers the U.S. aims to "maintain market access" into Canada and Mexico, but the USMCA could face annual reviews if no agreement is reached before its 2036 expiration.
Carney's new advisory committee on U.S.-Canada trade, which includes Charest, will hold its first meeting next week. The group is expected to provide strategic guidance as negotiations intensify.
