Canada’s ambassador to the United States emphasized in a video conference on Thursday that the reintroduction of American alcohol into Canadian markets is a crucial condition for finalizing a trade deal to prevent the imposition of new tariffs, as reported by CBC News. Mark Wiseman conveyed this message while providing a comprehensive overview of the potential trade agreement to approximately 100 members of the Canada-U.S. trade council.
The council, comprising businesses, industry associations, and labor unions, also received insights from a former Canadian chief trade negotiator who expressed reservations about the proposed deal. Meanwhile, Canada’s negotiating team is currently engaged in urgent discussions in Washington with the Trump administration to avert the imposition of 50% tariffs on Canadian exports, with the deadline set for midnight on Friday.
During the discussion lasting around 30 minutes, Wiseman shared details of a tentative consensus aimed at sidestepping the new tariffs, according to three sources familiar with the call. These sources, who requested anonymity due to confidentiality concerns, mentioned that approximately 35 Canadian officials are actively involved at the Canadian Embassy in Washington to finalize the agreement’s language within a timeframe of 24 to 48 hours.
The potential deal under consideration involves the reduction of tariffs on steel, aluminum, and automotive products, as well as modifications to the allocation of dairy import licenses by the Canadian government. However, concerns have been raised by the dairy industry regarding the potential influx of American dairy products into Canadian retail outlets as a consequence.
Following Wiseman’s departure from the call, Canada’s former chief trade negotiator Steve Verheul cautioned the council members about potential pitfalls associated with the proposed deal. Verheul, who played a pivotal role in previous trade negotiations resulting in the Canada-U.S.-Mexico Agreement and the NAFTA revisions, highlighted the immediate threat posed by Trump’s Section 338 tariffs. He expressed reservations about agreeing to sectoral tariffs and making such concessions, underscoring the risks for Canada in the long term.
The anticipated agreement may see a reduction in U.S. steel and aluminum tariffs from 50% to 25%, as well as a decrease in the tariff rate on Canadian-manufactured vehicles from 25% to 15%, with exemptions for American content. Despite these developments, the Canadian auto sector’s hopes for an exemption for Canadian-produced components from U.S. tariffs were dashed during the call, with the matter deferred to future CUSMA negotiations.
Verheul’s message to the council emphasized the importance of Canada explicitly rejecting the legitimacy of the Trump administration’s sectoral tariffs and maintaining a focus on achieving duty-free trade during the upcoming CUSMA review. He also highlighted the need for enhanced consultation with affected industries and raised concerns about the lack of substantive briefings provided to premiers and industry stakeholders.
Furthermore, concerns were expressed about the disparity in information sharing between Canadian and U.S. industry representatives, with the latter reportedly receiving more detailed briefings from the Trump administration. The council also discussed the involvement of former finance minister and deputy prime minister Chrystia Freeland, who underscored the challenges associated with reversing tariff agreements once in place, especially in the event of changing administrations in Washington.
