Canada’s envoy to the United States emphasized in a virtual meeting on Thursday that the return of American alcohol to Canadian markets is a key requirement for finalizing a trade agreement and preventing the imposition of new tariffs. Ambassador Mark Wiseman conveyed this message during a comprehensive briefing on the potential trade deal to around 100 members of the Canada-U.S. trade council.
The council, comprising various businesses, industry associations, and labor groups, also received insights from a former Canadian chief trade negotiator who expressed reservations about the deal. The Canadian negotiation team is currently engaged in critical talks in Washington with the Trump administration to avert the looming threat of 50% tariffs on Canadian exports, with the deadline set for midnight on Friday.
Wiseman shared details of a tentative consensus to avoid the new tariffs during the 30-minute discussion, as reported by sources familiar with the call. He outlined that approximately 35 Canadian officials are actively working at the Canadian Embassy in Washington to finalize the agreement’s language within a tight timeframe of 24 to 48 hours.
The potential deal involves reducing tariffs on steel, aluminum, and automobiles, as well as modifications to the allocation of dairy import licenses by the government. Notably, concerns were raised about the possibility of increased American dairy products flooding the Canadian market as a consequence of these changes.
Following Wiseman’s departure from the call, former chief trade negotiator Steve Verheul cautioned the council about the risks associated with the proposed deal. Verheul highlighted the immediate threat posed by Trump’s Section 338 tariffs while expressing concerns about potential long-term disadvantages for Canada if certain concessions were agreed upon.
Under the anticipated agreement, the U.S. is expected to decrease steel and aluminum tariffs from 50% to 25%, and reduce the tariff rate on Canadian-built vehicles from 25% to 15%, with provisions for American content. However, the automotive industry was disappointed to learn that their desired exemption for Canadian-made content from American tariffs would not be granted and would be deferred to CUSMA negotiations.
Verheul conveyed a strong message to the council regarding the importance of maintaining leverage in negotiations and avoiding hasty concessions that could undermine Canada’s position in future discussions. He also highlighted the need for clear communication on Canada’s stance on sectoral tariffs and the pursuit of duty-free trade in upcoming CUSMA reviews.
Moreover, concerns were raised about the lack of adequate consultation with relevant industries and the need for more transparent communication with industry stakeholders. Former finance minister Chrystia Freeland, another council advisor, echoed these sentiments and emphasized the challenges of reversing tariff agreements once they are in place.
The council members expressed frustration over perceived disparities in information sharing between Canadian and U.S. industry representatives, underscoring the importance of enhanced communication and consultation moving forward.