By Paul Vieira
OTTAWA--The Trump administration must provide relief on hefty sectoral tariffs affecting automobiles, steel and aluminum as part of any deal with Canada on extending the current North American trade pact, says the minister in charge of U.S.-Canada trade.
Dominic LeBlanc added Canadian officials won't heed to a never-ending series of U.S. demands just so talks on the renewal of the existing U.S.-Mexico-Canada trade treaty, or USMCA, can shift into a higher gear.
His remarks to attendees at a Toronto conference emerge as concern escalates about the slow pace of talks between Ottawa and Washington regarding USMCA, which faces a formal, U.S.-led review this summer. Talks between the U.S. and Mexico are at an advanced stage. U.S. officials, such as Trade Representative Jamieson Greer, describe discussions with Canada as challenging, adding there are unresolved issues. Greer reiterated those concerns in testimony to Congress on Wednesday.
In Ottawa, Prime Minister Mark Carney told reporters he would not allow Washington to dictate the terms of USMCA negotiations.
LeBlanc said any breakthrough is contingent on U.S. relief on sectoral tariffs of up to 50% on Canadian-made industrial goods. He said such a move could open the door for certain U.S. demands, such as provinces dropping their ban on U.S. wines and spirits in their government-run liquor stores. LeBlanc identified relief on sectoral tariffs as Canada's most-important demand.
"We think...there's an ability to put together a package that will very much be in the economic interest of both countries. And that might clear the deck of some of these bilateral issues that the Americans are raising with us," LeBlanc told attendees at an event organized by The Globe and Mail newspaper.
U.S. and Canadian officials were in talks last fall about easing sectoral tariffs until President Trump terminated the negotiations following Canadian advertising that used audio from former president Ronald Reagan to criticize protectionist trade policy.
LeBlanc added that he's not expecting the U.S. to eliminate the sectoral tariffs, which presently sit at 50% on foreign aluminum and steel, and 25% on cars. Trump has said the U.S. doesn't need cars made in Canada. "I think we should be realistic," LeBlanc said, while adding the White House has "shown some willingness to talk about" tariff relief.
In Washington, Greer told members of the House of Representative's Ways and Means Committee that Canada's efforts to reduce its reliance on U.S. trade to drive growth poses hurdles toward an agreement. Canada is "doubling down on globalization when we're trying to correct for the problems of globalization. So those are two models that don't fit together very well," Greer said.
Greer added that, in contrast, Mexico has taken important steps on trade, most notably raising tariffs on products from China and Vietnam that might end up in the U.S. market. "Mexico itself understands that it needs to be better aligned with the United States on trade policy," he said.
Most Canadian exports to the U.S. are entering tariff free because they comply with USMCA's terms, so keeping the deal intact is considered crucial for the domestic economy. Uncertainty about the trade treaty's future has prompted some businesses to curtail investment and hiring plans.
If there is no agreement on July 1 to renew USMCA, the pact would remain in effect for the next decade, with the possibility of annual reviews. Analysts say that unlike Mexico, Canada has responded to U.S. demands on the trade treaty with a sharper tone. Over the weekend, Carney said in a video message that the country's economic ties with the U.S. now represent a weakness, as opposed to a strength.
On Tuesday, Canada's chief trade negotiator, Janice Charette, said there is no appetite among federal officials to significantly revise or rewrite USMCA's underlying terms. She added that Canada has already delivered substantial concessions, such as revoking a digital-services tax that has garnered bipartisan opposition in Congress, and dropping retaliatory tariffs imposed by former Prime Minister Justin Trudeau.
LeBlanc said Canada is willing to negotiate in good faith with the U.S. "But we're not going to make a series of concessions or agree to a series of things that aren't in the interest of the Canadian economy, just to get to a [negotiating] table...to then receive a whole second list of things that they're going to want," he said.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
04-22-26 1354ET
