On Thursday, Canada’s ambassador to the United States stated during a video conference that reinstating American alcohol on Canadian store shelves is an essential condition for finalizing a trade agreement with the U.S. to prevent new tariffs, as reported by CBC News.
Mark Wiseman shared this insight while delivering a significant briefing concerning the prospective trade agreement to roughly 100 members of the Canada-U.S. trade council.
The council, which comprises businesses, industry associations, and labor groups, also heard from a former chief trade negotiator for Canada who voiced apprehensions regarding the deal.
In Washington, Canada’s negotiation team is engaged in intense discussions with the Trump administration, aiming to avert 50 percent tariffs on billions of dollars in Canadian exports. The deadline for reaching an agreement is midnight on Friday.
During his approximately 30-minute address, Wiseman highlighted a preliminary agreement to sidestep the imposition of new tariffs, according to three sources who participated in the call. CBC News has chosen not to disclose the identities of these sources as they were not authorized to publicly comment on the conversation.
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According to sources, Wiseman indicated that approximately 35 Canadian officials are stationed at the Canadian Embassy in Washington to finalize the phrasing of a potential agreement. At the time of the call on Thursday morning, Wiseman mentioned that officials aimed to complete this work within a 24 to 48-hour timeframe.
He noted that the proposed agreement entails reducing tariffs on steel, aluminum, and automobiles, as well as adjustments to the government’s allocation of dairy import licenses. The dairy sector has cautioned that this could result in an increase of American dairy products available at Canadian retailers.
After Wiseman concluded his talk, Steve Verheul, Canada’s former chief trade negotiator and an adviser to the council, cautioned about the potential drawbacks of the prospective agreement, as per multiple sources.
Verheul previously guided Canada through challenging negotiations with the U.S. that culminated in the Canada-U.S.-Mexico Agreement and was also involved in earlier NAFTA talks.
He expressed to the council that while Trump’s recent Section 338 tariffs present an urgent challenge, Canada risks sacrificing a long-term benefit through the potential agreement. Sources reported that he raised concerns about agreeing to sectoral tariffs and making such concessions.
Steve Verheul, Canada’s former chief trade negotiator, attends a Canada-U.S. relations meeting at the Ontario Investment and Trade Centre in Toronto on Jan. 31, 2025. (Chris Young/The Canadian Press)
CBC News has reported that under the proposed agreement, the U.S. would decrease steel and aluminum tariffs from 50 percent to 25 percent.
The agreement is also anticipated to reduce Trump’s current tariff on Canadian-manufactured vehicles from 25 percent to 15 percent, with an exemption for American-made components, according to a source.
Participants on the Canada-U.S. trade council’s call reacted when Wiseman announced that the auto sector would not receive the concessions it had hoped for.
The Canadian automotive industry had been advocating for an exemption from American tariffs for Canadian-made products, but Wiseman informed them during the call that the U.S. would not budge on the issue, with the matter to be addressed later in CUSMA negotiations, sources indicated.
With new 50 percent tariffs set to take effect just after midnight, Canadian negotiators are once again in Washington to finalize a deal. David Cochrane, host of CBC’s Power & Politics, joins CBC News Network to break down the state of trade talks as the deadline approaches.
Verheul conveyed to the council that if Canada continues down this path, it would relinquish much of its negotiating power before the forthcoming CUSMA review, and he cautioned that this trajectory would likely result in more demands from the U.S., according to sources.
He indicated that most Americans do not support Trump’s tariffs, and that the American industry is largely in favor of maintaining CUSMA and its duty-free trade provisions.
Verheul pointed out that Canada is contemplating making considerable concessions at a time when U.S. industries still have the capacity to exert pressure on the Trump administration.
Trade talks between Canada and the U.S. have hit a breaking point over alcohol, with Prime Minister Mark Carney urging premiers to put American liquor back on shelves. Andrew Chang explains how alcohol became a top bargaining chip, how provincial liquor boards complicate trade and what’s driving the current tariff standoff.
(Photo credits: The Canadian Press, Reuters and Getty Images)
According to sources, Verheul emphasized the necessity for Canada to formally declare at this moment that it does not recognize the legitimacy of the Trump administration’s sectoral tariffs on aluminum, steel, and automobiles.
He asserted that achieving duty-free trade should remain one of Canada’s primary objectives during the upcoming CUSMA review and that Canada must clarify this if it intends to make such concessions.
Moreover, he mentioned that the Canadian government is not sufficiently consulting with the industries involved, and that the premiers had not received substantial data briefings, sources indicated.
Industry representatives told CBC News that unlike previous negotiations, they have been left uninformed while the U.S. industry is being provided with far more comprehensive briefings by the Trump administration. Sources noted that members of the council expressed their dissatisfaction during the call.
Another adviser to the council, former finance minister and deputy prime minister Chrystia Freeland, also participated in the call, sources reported. Freeland had previously led Canada’s negotiations with the Trump administration to transform NAFTA into CUSMA.
During the council’s call, Freeland raised concerns and suggested that if Canada moves toward accepting tariffs, it will be challenging to remove them later, even if there is a change in administration in Washington.