On the Dash:
- Canada-US sectoral tariff talks are paused, with negotiations likely deferred to the next USMCA review.
- Key disputes include steel, aluminum, forest products, dairy, and digital taxes, affecting trade flows and U.S.-Canada relations.
- Retaliatory measures and political tensions, including the Ontario ad controversy, continue to complicate progress.
Canada is unlikely to reach a near-term deal with the United States to reduce tariffs on steel, aluminum, and other sectors, Prime Minister Mark Carney said in Ottawa Thursday, signaling that negotiations will likely be rolled into next year’s review of the US-Mexico-Canada Agreement (USMCA).
Carney said talks had been close to a metals-tariff agreement, but President Trump terminated negotiations in October after Ontario aired television ads quoting former President Ronald Reagan opposing tariffs. According to Carney, based on his judgment and the broader CUSMa negotiations, Canada is unlikely to achieve sector-specific agreements.
While Canada remains ready to negotiate, particularly on forest products, the U.S. has imposed tariffs of roughly 45% on Canadian softwood lumber, frustrating U.S. homebuilders. Similarly, tariffs on steel, aluminum, autos, copper, and lumber have heavily affected Canadian exports, given the country’s reliance on the U.S. as a market.
Carney noted that he, Trump, and Mexican President Claudia Sheinbaum set broad parameters for the USMCA review during the FIFA World Cup draw in Washington on Dec. 5. While the U.S. Trade Representative Jamieson Greer acknowledged the deal has been broadly successful, he warned it is not an “unqualified success,” citing ongoing issues including Canada’s dairy import controls and digital taxes such as the Online Streaming Act and Online News Act.
Retaliatory measures by Canadian provinces after Trump’s tariffs in 2025, including bans on U.S. alcohol and procurement restrictions, remain in effect. Ontario Premier Doug Ford defended the TV ad that prompted Trump’s reaction, saying it was designed to generate a conversation in the U.S. about the impact of tariffs on workers and jobs and that it successfully reached a wide audience. He described the ad campaign as effective, citing more than a billion impressions worldwide, and said its aim was to get the message about fair trade and tariff harms in front of Americans, not to provoke the president
With three-quarters of Canadian exports bound for the U.S., the stakes are high, and delays in resolving sectoral disputes could have consequential economic consequences.
