Canada-US trade friction

Canada’s new majority government says it wants a new trade deal with Washington, but Prime Minister Mark Carney says the talks will not be on U.S. terms. (reuters.com) Carney’s Liberals won a parliamentary majority last week, giving him room to negotiate without relying on opposition parties. On April 22, he said Canada was “not a supplicant” ahead of the scheduled 2026 review of the United States-Mexico-Canada Agreement. (apnews.com) That review is due to begin July 1, 2026, under the trade pact’s six-year check-in. If the three governments do not agree to extend the deal, the agreement stays in place for now but faces 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 mostly duty-free North American trade. Reuters reported that Canadian officials now want reciprocity on U.S. tariffs covering steel, aluminium and autos before they sign onto a broader reset. (reuters.com) Washington has kept those sector tariffs in place. The White House said in March 2025 that imported automobiles and key parts would face a 25% tariff, with a separate White House fact sheet saying steel and aluminum tariffs were strengthened again in April 2026. (whitehouse.gov; whitehouse.gov) Canada has already answered with retaliation. Ottawa said it imposed 25% tariffs on C$29.8 billion worth of U.S. goods effective March 13, 2025, after U.S. metals tariffs took effect. (canada.ca) The dispute is bigger than one round of duties because the United States and Canada are each other’s largest export markets for many industries, especially autos, energy and metals. Brookings wrote last year that the new U.S. tariffs were already reshaping North American auto supply chains before the 2026 review even began. (brookings.edu) Mexico is caught in the same squeeze. Reuters reported this week that U.S. Trade Representative Jamieson Greer told Mexican auto and steel companies not to expect the USMCA renegotiation to remove those tariffs. (reuters.com) Carney has also tied the trade fight to a broader push to make Canada less dependent on the U.S. market. After securing his majority, he said his government would focus on major infrastructure and economic projects that strengthen domestic resilience. (reuters.com) That leaves the next two months looking less like a routine treaty review and more like a test of whether North America can keep one trade framework while its members tax one another’s core industries. (reuters.com; congress.gov)