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Canada Pushes for Tariff Relief Before USMCA Review, Rules Out Baseline Deal

Ottawa says leverage comes from U.S. industry pressure plus earlier Canadian concessions.

Overview

  • Trade Minister Dominic LeBlanc told senators talks are ongoing and he hopes to reduce or remove sectoral tariffs before the 2026 USMCA review, saying discussions have not hit a dead end.
  • He said there has been no suggestion to fold the sectoral tariff talks into the USMCA review and that Canada seeks a separate negotiated outcome.
  • LeBlanc rejected accepting any agreement built on a baseline tariff, a template some other U.S. partners have taken, and instead is pursuing targeted relief.
  • U.S. measures now include 50% tariffs on steel and aluminum and 25% on autos, with new Section 232 tariffs this week on lumber and furniture products.
  • Canada has lifted its countermeasures and dropped a planned digital services tax, while banking on pressure from U.S. manufacturers, unions and politicians, and keeping supply management off the table.