U.S. Lays Out Terms for Trade Deal with Canada

(The Center Square)–U.S. leaders want American products, including whiskey and milk, on Canadian shelves as part of any deal between the neighboring nations.

U.S. officials have laid out demands for trade talks with Canada and Mexico, making clear that they won’t rubber stamp the existing free trade agreement for the three North American nations without changes. President Donald Trump signed that deal, known as the United States-Mexico-Canada Agreement, or USMCA, in 2020 to replace the North America Free Trade Agreement, or NAFTA.

Canada has long been a key U.S. trade partner. In 2024, Canada was the top destination for U.S. exports and the third-largest source of U.S. imports. However, that relationship has changed in Trump’s second term. Trump hit trade with Canada with a 35% import duty for goods that don’t fall under terms of the USMCA.

Those tariffs hit Canada’s economy hard. Canadian exports dropped, business investment slowed, and tariff uncertainty continues to drag the nation’s economy, according to a recent report from the International Monetary Fund.

U.S. Trade Representative Jamieson Greer told Congress last week that the USMCA contains provisions for a joint review that are unique to the deal and were put in place specifically to make sure the U.S. keeps its economic leverage.

Greer said the USMCA was “successful to a certain degree.”

“But at the same time, it is clear that we have not achieved all of our goals with respect to strengthening U.S. manufacturing capacity and creating good jobs, and nearly all stakeholders advocate improvements,” he said in his opening statement. “I don’t think we can say that USMCA is an unqualified success.”

Greer said he wants Canada to open its dairy market to U.S. farmers and change an online streaming law that U.S. officials say hurts American tech companies. Greer said the U.S. also wants Canadian provinces to lift bans on selling American spirits. Those bans were put in place in response to Trump’s tariffs.

Greer also pointed to “discriminatory procurement measures” in Ontario, Quebec, and British Columbia; complicated customs registration for Canadian recipients of U.S. exports; and “Alberta’s unfair treatment of electrical power distribution providers in Montana.”

The details come as leaders from the U.S., Canada and Mexico prepare for formal talks for a broader review of the USMCA next year.

Since Trump imposed tariffs on Canada, leaders in Ottawa have sought out trade deals with other nations around the world, hoping to take the sting out of U.S. import duties and reduce its reliance on the U.S.

Prime Minister Mark Carney said he plans to protect Canada’s economic interests in next year’s talks. He told provincial and territorial premiers on Thursday that the goal would be to secure the best deal for Canada.