Canada-U.S. Trade Minister Dominic LeBlanc met with U.S. Trade Representative Jamieson Greer in Washington on Thursday afternoon as trade talks continue with less than a week to go before a fresh round of American tariffs are due to hit Canada.
Canada’s chief negotiator Janice Charette was also part of those talks, LeBlanc confirmed on social media after the meeting.
“Negotiations are ongoing, and we continue to advance Canada’s interests,” the minister posted on X.
Sources with direct knowledge of the negotiations told Global News on Thursday that the Trump administration is pushing to keep at least some level of tariffs on vehicles and auto parts compliant under the Canada-U.S.-Mexico Agreement on free trade (CUSMA) under an eventual deal.
The sources added that Canada is expected to make additional concessions beyond dropping provincial and territorial boycotts on U.S. alcohol and easing restrictions on dairy imports — two irritants identified by the U.S. that are behind the latest tariff threat.
While Canada is willing to walk away from a deal if tariffs are not reduced enough, the sources said the preference of the Carney government is to get a deal now, as part of a three-step trade strategy they are attempting to employ.
That strategy would start with a deal on on sectoral tariffs and avoiding new ones coming into place, followed by new partnerships with the U.S., in areas like trade and defence and, finally, renegotiating CUSMA, according to the sources.
Tariff deadline looms
While Canada has been dealing with U.S. President Donald Trump’s tariffs for more than a year, including with sectoral tariffs on steel, aluminum and automobiles, the vast majority of Canadian goods traded under the CUSMA have been exempt from the tariffs.
This could change on Aug. 19.
Trump has vowed to hit Canada with new sweeping 50 per cent tariffs on a wide range of goods.
Trump’s decision to impose 50 per cent tariffs on Canadian goods was in response to what the U.S. calls “discriminatory” measures.
Trump signed three executive orders, each one using a different justification for the new tariff: the provincial and territorial boycotts on American alcohol products, Canada’s retaliatory tariffs on U.S.-made vehicles and auto parts, and quotas on American dairy imports under Canada’s supply management system.
In early 2025, several Canadian provinces removed U.S. alcohol from their shelves in response to Trump’s trade war and threats to make Canada the “51st state.”
Trade talks ongoing
The trade negotiations have hit several snags with the Americans refusing to accept a deal that does not include at least some tariffs on steel, aluminum, automobiles and softwood lumber, sources told Global News earlier this week.
Sources added, however, that Canada is willing to “walk away” and let tariffs hit next week if there isn’t a substantial reduction in sectoral tariffs.
Both sides are working to present a deal to Trump and Prime Minister Mark Carney before Aug. 19, they said.
What’s at stake?
If the CUSMA deal breaks down, it would lead to more than 100,000 job losses in Canada and more than twice that in the United States, a report warned earlier this week.
In July, Washington said it won’t renew the deal, known as USMCA in the U.S., in its current form. That means the trade deal must be reviewed annually, adding to the volatility and economic uncertainty facing businesses.
A lot is riding on the deal being renewed, the report by the Canadian American Business Council warns.
“Successful renegotiation of USMCA would create an additional 137,000 American jobs and 98,000 Canadian jobs in 2027 relative to the status quo,” the report reads.
Dairy Farmers of Canada issued a statement Thursday in a release as the dairy sector is one of the prime areas in focus during these negotiations, with president David Wiens saying, “our national food sovereignty is not up for negotiation.”
“Canadians are understandably worried about the impact of U.S. trade disruptions and the impact it could have on their lives,” said Wiens.
“It is also clear that Canadians believe in the importance of having control over our food supply and ensuring that Canada’s strong domestic dairy sector is not compromised.”
“It is imperative that no more concessions on dairy or supply management are made in talks with the United States.”
Around two in five Canadian exporters said they currently export a product to the U.S. that would fall under the scope of the new incoming tariffs, a survey from the Canadian Federation of Independent Business said on Wednesday.
Of these, more than three-quarters (77 per cent) said they expect to lose revenue if the tariffs go ahead and more than one in three (35 per cent) said they stand to lose at least half or more of their revenues.
Businesses have started battening down the hatches ahead of the next round of tariffs, a survey by Canadian business financing solutions firm Merchant Growth has found.
More than six in 10 small businesses surveyed told Merchant Growth that they have at least some reliance on the U.S., while 13 per cent said the relationship with the U.S. was “core” to their business.
More than half (55 per cent) have cut spending, while a quarter (25 per cent) have delayed hiring. Another quarter said they’ve raised prices for consumers.
–with files from Global’s Mackenzie Gray, Reggie Cecchini, and Ariel Rabinovitch