U.S. official criticizes Canada’s retaliatory moves as CUSMA negotiations loom
For any Canadian employers looking for greater certainty when it comes to workforce planning, U.S. tariffs are not going away any time soon, according to one U.S. official.
Tariffs will be built into any future trade agreement between Canada and the United States, including a renegotiated Canada–U.S.–Mexico Agreement (CUSMA), U.S. President Donald Trump’s chief trade negotiator told CBC.
Canada should no longer expect a tariff‑free arrangement with its largest trading partner, said U.S. trade representative Jamieson Greer, noting that tariffs are a standard element of U.S. trade policy, not an exception.
“When we go to other countries, and we make a deal with them ... they agree that we can have a tariff on them,” Greer said, according to CBC.
“If Canada wants to agree that we can have some level of higher tariff on them while they open up their markets to us on things like dairy and other things, then that's a helpful conversation,” he said.
Recently, Trump vowed to use tariffs in a “'more powerful and obnoxious way” after the U.S. Supreme Court concluded it was not legal for Trump to use the International Emergency Economic Powers Act (IEEPA) for his “Liberation Day” tariffs and fentanyl‑related duties on Canada, Mexico and China.
And Trump's decision to push ahead with a 15% global tariff on most US imports is straining ties with key allies, just days after the US Supreme Court ruling. Australia, Singapore, and Japan have all moved quickly to seek clarity or exemptions, underscoring how far‑reaching the temporary import duty could be for trading partners and multinational employers, according to a report.
CUSMA review raises challenges
CUSMA – which replaced NAFTA – is up for review this year. Under the agreement’s review clause, Canada, the United States and Mexico must each signal by July 1 whether they intend to extend the pact, seek new negotiations or allow it to expire.
Canada and the United States have not yet begun formal talks on the future of the deal, although Prime Minister Mark Carney’s government has indicated negotiations are expected within weeks, CBC reported.
Greer argued that CUSMA, signed by Trump in 2018, did not sufficiently encourage industrial production on U.S. soil. “If you want to have that deal, you need to have better rules, stricter rules,” he said.
He raised particular concern about so‑called “screwdriver operations,” where goods made in third countries receive minimal processing in Canada before being shipped duty‑free into the U.S. market. “We don't want a situation where countries like Vietnam or China can send a bunch of stuff to Canada, do a screwdriver operation and send it across the border into the United States duty‑free,” Greer said.
American demands not met: Greer
The Trump administration has already imposed a series of tariffs on Canadian exports, targeting steel, aluminium, softwood lumber and the auto sector. And Canada has retaliated.
Greer, meanwhile, criticized Canada’s response to earlier U.S. tariffs, arguing that Ottawa has not met several American demands to unwind its retaliatory actions.
“Put American wine and spirits back on the shelf; they haven't done that,” he told CBC. “To reopen to America procurement opportunities; they haven't done that. To give us fair access to their dairy markets; they haven't done that.”
Business leaders across the country have called for increased government support, improved access to capital, and meaningful tax reform amid the tariffs situation. And the federal government previously announced a $100 million initiative to support entrepreneurs and small businesses in rural and remote communities across the country.
