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The negotiation landscape between canada and the United States has shifted into a more combative phase. U.S. trade representative Jamieson Greer told CBC reporters that Ottawa must be prepared to accept some level of tariffs as part of any future arrangement with the Trump administration, including talks over the renewal of the Canada-United States-Mexico Agreement (CUSMA). These comments, given shortly after the U.S. state of the union address, underscore a U.S. push toward tougher trade terms and more protection for domestic manufacturing.
Greer framed the issue as a standard bargaining position: when Washington makes trade pacts, partners often consent to duties that shield key sectors. He argued that Canada should consider reciprocal concessions in market access—particularly in areas such as dairy—if the U.S. receives allowances to apply higher levies. The remarks represent a clear signal that the administration is looking beyond a simple rollover of CUSMA and toward a reworked pact emphasizing industrial reshoring.
What the U.S. position means for CUSMA
Greer said the current agreement, signed in 2018, did not sufficiently deliver on the goal of returning production to U.S. soil. He singled out the automotive, steel and aluminum sectors as priorities for reshoring supply chains. As part of his rationale, he described concerns that components processed abroad could enter the U.S. via Canada without meaningful transformation and escape duties.
Stricter rules and enforcement
The U.S. demand centers on tougher origin rules and enforcement mechanisms. Greer warned against what he called simple component assembly abroad—often described colloquially as a “screwdriver operation”—that would let goods cross the border duty-free. He said any extension of CUSMA should contain more rigorous provisions to prevent such circumvention and to ensure that the value chain actually benefits U.S. jobs and factories.
Tariffs as leverage and a policy tool
Tariffs have already been deployed by the Trump administration against Canadian exports across multiple categories, including softwood lumber, autos, and metals such as steel and aluminum. Greer presented tariffs not merely as punishment but as bargaining chips that the U.S. expects to keep on the table. He contrasted Canada’s response unfavorably with Mexico’s cooperation, noting Canadian provincial and federal measures that were introduced in retaliation during earlier rounds of trade friction.
Specific U.S. requests
Among Greer’s pointed criticisms were Canadian policies the U.S. sees as unfair. He asked Ottawa to reverse retaliatory measures, to restore greater access for U.S. wine and spirits in Canadian markets, to reopen procurement opportunities to American suppliers, and to provide increased access to the Canadian dairy sector. Greer framed these requests as standard items in bilateral bargaining, saying Mexico had made more concessions and that Canada had room to meet Washington halfway.
Canada’s response and domestic strategy
Canadian ministers framed their response around diversification and industrial support. Finance Minister François-Philippe Champagne emphasized that Canada, by many measures, still pays the lowest effective cost to enter the U.S. market, though he acknowledged that specific industries face much higher sectoral charges. He used that point to argue for widening Canada’s trade relationships to reduce exposure to U.S. policy shifts.
Industry Minister Mélanie Joly said the government has engaged continuously with U.S. counterparts and businesses and has developed a plan to support sectors hardest hit by tariffs. That strategy includes a new Defence Industrial Strategy meant to create jobs in automotive, steel and aluminum production, acting as both an economic countermeasure and an incentive to attract investment.
Attracting investment and partners
Joly noted recent outreach to European auto manufacturers and discussions aimed at drawing investments from Germany, South Korea and elsewhere. The government indicated it will press global automakers and other manufacturers to expand or preserve operations in Canada, offering an alternative to dependence on the U.S. market alone. That approach is presented as a response to job losses from companies scaling back in Canada.
Political reactions and next steps
Backbench and opposition voices noted the administration’s long-standing inclination toward tariffs and viewed Greer’s comments as confirmation of established policy. Conservative MPs urged the Canadian government to secure the best possible terms for workers and industries. Ottawa and Washington must decide by July 1 whether to extend CUSMA, renegotiate it or let it lapse, and formal talks were expected to begin within weeks according to the government led by Prime Minister Mark Carney.
With trade talks looming and tariffs already reshaping commerce, Ottawa’s combination of diplomacy, industrial planning and diversification efforts will determine how Canada navigates a moment of heightened trade tension. The course of the CUSMA review and bilateral negotiations will be watched closely by industries, investors and political actors on both sides of the border.