LILLEY: Here's what's really going on with Canada-U.S. trade talks in Washington
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The talks between Canada and the United States in Washington this week have been bumpy at times, but there are signs of progress according to those with knowledge of the talks. Despite expressions of frustration and irritation by the American side toward Canada’s slow pace of movement , 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 this week.
Movement in spite of 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 their industry would have a tougher time meeting that requirement.
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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.
On 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.
It’s also bad policy for Canadian consumers because it would increase costs and it’s bad policy for Canadian broadcasters and streamers who would have to pay 25% of all revenue toward Canadian content. What the government is replacing this plan with is unclear, but the original plan was bad for Canada and bad for trade negotiations.
Mr. Ford goes to Washington
Next Monday and Tuesday, Ontario Premier Doug Ford will be in Washington for meetings with business leaders. Given Ford’s strong stance against Trump, this is a trip that is making the Carney Liberals in Ottawa nervous.
While Ford will meet with people like Ross Perot Jr., who heads up the U.S. Chamber of Commerce, he’s unlikely to have many meetings, especially public meetings, with senior Republicans. Ford is described as “toxic” and “radioactive” to the Trump administration, meaning any meetings with Republican officials will most likely be held quietly behind closed doors.
Talks between Canada and the United States are at a delicate point. Next week, all eyes will be on Ford in Washington with fingers crossed that he doesn’t do or say anything that will set them back.