Canada’s envoy to the U.S. emphasized the necessity of reintroducing American alcohol into Canadian markets as a key condition for finalizing a trade agreement with the U.S., according to information obtained by CBC News. Mark Wiseman conveyed this message while providing a comprehensive overview of the potential trade pact to approximately 100 members of the Canada-U.S. trade council.
The council, comprising various businesses, industry associations, and labor unions, also received insights from a former top Canadian trade negotiator who expressed reservations about the deal. Concurrently, Canada’s negotiation team is engaged in urgent discussions with the Trump administration in Washington to avert imposing 50% tariffs on Canadian exports, with a looming deadline of midnight Friday.
In a briefing lasting around 30 minutes, Wiseman discussed a preliminary consensus to prevent the imposition of new tariffs, as reported by three reliable sources. The prospective deal is expected to encompass reductions in steel, aluminum, and automobile tariffs, alongside modifications in the allocation of dairy import licenses by the government, which could potentially increase the presence of American dairy products in Canadian stores.
Following Wiseman’s departure from the call, the council was cautioned by one of its advisers, former Canadian chief trade negotiator Steve Verheul, about potential drawbacks of the agreement. Verheul, known for leading negotiations that led to the Canada-U.S.-Mexico Agreement and prior NAFTA talks, expressed concerns that while immediate threats of Trump’s Section 338 tariffs needed to be addressed, agreeing to certain concessions could compromise Canada’s long-term interests.
Verheul highlighted the risk of relinquishing leverage before the CUSMA review and emphasized the likelihood of facing additional demands from the U.S. He underscored the broad opposition to Trump’s tariffs within the American industry and stressed the importance of maintaining duty-free trade under CUSMA.
The council members were informed that the U.S. might reduce steel and aluminum tariffs from 50% to 25%, and lower the headline tariff rate on Canadian-manufactured vehicles from 25% to 15%, with exemptions for American content. However, concerns were raised during the call about the auto industry not receiving anticipated concessions, particularly regarding Canadian-made components.
Verheul urged Canada to formalize its rejection of sectoral tariffs imposed by the U.S. administration and reiterated the necessity of aiming for duty-free trade in the upcoming CUSMA review. He emphasized the importance of transparent consultations with affected industries and raised concerns about the lack of detailed briefings for Canadian stakeholders compared to their U.S. counterparts.
Former finance minister Chrystia Freeland, another council adviser, also participated in the call and raised doubts about the potential challenges of removing tariffs once agreed upon, even if the political landscape in Washington changes.