HERE’S WHAT’S REALLY GOING ON WITH CANADA-U.S. TRADE TALKS IN WASHINGTON

Anger, frustration, and anxiety remain, but there’s also movement in the right direction as trade talks move forward

The talks between Canada and the United States in Washington last week were bumpy at times, but there were signs of progress, according to those with knowledge of the talks. Despite expressions of frustration and irritation from the American side at Canada’s slow pace, there actually is movement.

As Dominic LeBlanc, the minister responsible for Canada-U.S. trade, joined Canada’s top negotiator Janice Charette in Washington for meetings with Donald Trump’s top negotiator, Jamieson Greer, things weren’t as smooth as some would have hoped. The Americans have a list of some 30 trade irritants with Canada, while LeBlanc showed up with a list of small, technical amendments that Canada would be willing to consider, but nothing that would make the Americans think we are serious about talks.

The American side has been pointing to the booze ban across most provinces and the anti-American rhetoric of some politicians as impediments to furthering trade talks.

“Is the juice worth the squeeze with Canada?” one American official said to his Canadian counterpart last week.

Movement despite frustration

 That said, there is some positive movement despite the frustrations.

Most important for Ontario’s economy is that discussions around lifting tariffs on products like steel and aluminum now also include a push to lift tariffs on autos and auto parts.

In October, shortly after Prime Minister Mark Carney’s second White House visit and before talks blew up again, there was a plan being devised to lift tariffs on steel and aluminum. That plan, though, didn’t include lifting tariffs on autos or auto parts, which, after oil, remain Canada’s second-largest exports by dollar value at $48.1 billion US in 2025, down from $50.9 billion in 2024.

Ensuring that any deal includes autos is key for the Canadian economy.

The proposal on the table from the Americans now is to increase the requirement for parts sourced from North America to 82% for all parts, with 50% of those coming from the U.S. As steep as that sounds, that is something industry leaders said is feasible for Canada’s auto industry and on sourcing 50% of parts from the U.S., we are already there.

For Mexico, that’s a bigger lift as its industry would have a tougher time meeting that requirement.

What does anyone get in exchange for concessions?

Mexico is further along in the review of the Canada-United States-Mexico-Agreement. That said, Mexican officials have been expressing frustration of late that despite being open to moving on the 60 different trade irritants the Americans have raised with them, President Claudia Sheinbaum is getting little in return for any concessions.

Last Thursday, the Carney government announced that it was pressing pause on a decision by the Canadian Radio-television and Telecommunications Commission, Canada’s broadcast regulator, to require American streamers to pay 15% of their Canadian revenue toward Canadian content. That move is seen as a concession to the Trump administration, and in some ways it is, but this is also a policy that was opposed by the Joe Biden administration when it was introduced several years ago.