Canada presses trade leverage

Canada is heading into a July trade deadline with new leverage at home and little room to yield on U.S. tariffs. (reuters.com) Prime Minister Mark Carney won a parliamentary majority last week, giving his Liberal government enough seats to pass legislation without opposition votes as it negotiates with President Donald Trump’s administration. Reuters reported that Carney now faces a July 1, 2026 decision point in the United States-Mexico-Canada Agreement review. (apnews.com) (congress.gov) That review is built into the trade pact itself. If the three countries agree on July 1 to continue the deal, it extends; if they do not, the agreement stays in place but moves into annual reviews until its scheduled 2036 expiry. (congress.gov) (ustr.gov) The immediate fight is over tariffs that sit outside the pact’s promise of predictable market access. The White House kept Section 232 tariffs in place on steel and aluminum and imposed a 25% tariff on imported automobiles and some auto parts in 2025. (whitehouse.gov) (federalregister.gov) Canada answered with its own tariffs. Ottawa imposed 25% counter-tariffs on March 13, 2025 on C$29.8 billion of U.S. steel, aluminum and other goods, then later removed most of the broader retaliatory tariffs while keeping those on steel, aluminum and autos in place during negotiations. (canada.ca 1) (canada.ca 2) Carney’s position is that Canada can bargain hard on market access, rules and sector deals, but not under a system where tariff policy changes at a president’s discretion. Reuters said Canadian officials want any broader agreement with Washington to include relief on metals and autos, not just a narrow USMCA rollover. (reuters.com) (msn.com) Washington has signaled a harder line. Reuters reported this week that U.S. Trade Representative Jamieson Greer told Mexican auto and steel groups they should not expect the USMCA renegotiation to remove Trump’s tariffs, a message that also narrows Canada’s room for a quick settlement. (msn.com) All three governments have already opened domestic consultation processes ahead of the review. Canada launched public consultations in September 2025, and the Office of the United States Trade Representative opened its own comment process the same month and held hearings in December 2025. (canada.ca) (federalregister.gov) The trade stakes are largest in sectors that cross the border repeatedly before a product is finished. Cars, parts, steel and aluminum move through integrated North American supply chains, so tariffs can hit the same production network several times before a vehicle reaches a dealer lot. (congress.gov) (brookings.edu) For now, Ottawa is entering the July review with a stronger mandate in Parliament and the same basic demand at the border: a trade deal that survives the next tariff announcement. (reuters.com) (theglobeandmail.com)