The United States will keep tariffs on Canadian and Mexican goods in place even as negotiations over the Canada-U.S.-Mexico Agreement (CUSMA) continue, according to a top U.S. trade official. This move reflects the administration’s broader strategy to leverage tariffs as a negotiating tool within the continental trade framework.
Jamieson Greer, the U.S. Trade Representative, stated that while many countries have reluctantly accepted the Trump administration’s tariff policies, Canada remains resistant, complicating negotiations. He highlighted that formal talks have started with Mexico but have yet to begin with Canada, underscoring a stalemate in U.S.-Canada trade relations.
Under the current CUSMA review process, Canada, the U.S., and Mexico will decide in July whether to renew, withdraw, or maintain the agreement in a conditional state subject to yearly reviews. Greer emphasized that the administration is unlikely to approve a straightforward renewal and will notify Congress of its decision imminently.
The administration’s tariff strategy exempts goods that comply fully with CUSMA rules, which has protected sectors such as energy, critical minerals, and fertilizer trade between the three countries. However, separate sectoral tariffs on Canadian steel, aluminum, cabinetry, and automobiles remain firmly in place, causing friction.
Greer reiterated President Trump’s frequently stated skepticism about Canadian automobile manufacturing, questioning why cars are made in Canada rather than domestically, signaling no immediate relief for the auto sector’s tariffs. The administration aims to prioritize North American supply chains for national security, seeking to reshape trade terms to favor domestic production and regional sourcing.
The tense trade dialogue reflects broader challenges as the Trump administration balances protecting certain industries with maintaining continental trade cooperation. While some sectors are deemed stable and mutually beneficial, key areas face prolonged negotiation with uncertain outcomes.