Prime Minister Mark Carney on Wednesday pushed back at the suggestion the United States is setting conditions before renegotiations on USMCA are launched.Sean Kilpatrick/The Canadian Press
The Trump administration is demanding upfront concessions as a precondition of negotiations on the United States-Mexico-Canada Agreement, sources say, as Prime Minister Mark Carney suggested Ottawa would not allow Washington to dictate the terms.
Two sources familiar with the talks say U.S. President Donald Trump’s administration has asked Canada to unilaterally change or scrap domestic policies, from dairy to provincial bans on American liquor, or the Online Streaming Act and the Online News Act, before it will sit down to negotiate.
The Globe is not identifying the sources as they were not authorized to discuss the matter publicly.
The Prime Minister on Wednesday pushed back on the notion that the administration would be able to dictate the terms.
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“It’s not a case of the United States dictates the terms. We have a negotiation,” Mr. Carney told reporters in Ottawa.
He was answering questions about the dynamics of early talks as the three parties prepare to undertake a scheduled review of the USMCA, which includes deciding whether to extend the agreement beyond 2036.
During these same talks, Ottawa is trying to resolve protectionist U.S. tariffs on Canadian goods, including steel, aluminum and autos.
One of the sources said the United States is content with the current state of affairs – as it collects revenue from hefty U.S. tariffs on Canadian goods such as aluminum, autos and steel – and wants to see what else it can extract from Ottawa before negotiating.
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For negotiations to begin in earnest, the second source said, U.S. negotiators have a laundry list of possible preconditions, including how Canada administers quotas on dairy.
The second source said the Carney government has resisted this approach from Washington, noting Canada received nothing in return in for previous concessions, such as 2025’s lifting of the digital sales tax – that targeted global tech giants – or in 2024, when Canada imposed tariffs on Chinese electric vehicles at the request of the previous Biden administration.
Radio-Canada was the first to report Wednesday on the upfront concessions being demanded by the Trump administration.
There have been some discussions between Canada and U.S. Trade Representative Jamieson Greer, but the source said not much is expected to happen because President Trump’s sole fixation right now is the Iran war.
The good news, the source said, is that U.S. Commerce Secretary Howard Lutnick has largely been pushed out of the picture. Mr. Lutnick has taken an antagonistic attitude toward trade negotiations with Canada in recent days.
On Tuesday, Janice Charette, chief trade negotiator to the United States, warned of a bumpy road ahead and predicted negotiations will extend beyond a scheduled July 1 review date.
The second source said the possibility still exists that the United States might invoke a withdrawal clause in USMCA – which gives six months’ notification for its exit – as a means to put pressure on Canada.
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Mr. Carney said talks are not a one-way street, saying in French it’s always the case that in negotiations people ask for concessions.
Finance Minister François-Philippe Champagne on Wednesday said Ottawa has been “very firm at the negotiating table defending the interests of Canada.”
But he added: “We’re not going to negotiate in public, but they certainly understand our position,” he told reporters.
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“We’ve made some counterproposals, which they’re aware and the time will come to really roll up our sleeves,” he said, adding later: “We can come to a mutually successful outcome. It will take some time.”
Ms. Charette on Tuesday urged Canadian businesses to lobby their American counterparts in support of the USCMA renewal.
“I need Canadian businesses to reach out to your clients, reach out to your partners in the United States,” she said.
“Help them to make the case for the economic relationship with Canada, for the review and renewal of this agreement.”
“We’re their No. 1 customer,” she added. “So let’s use the power of the customer.”
Ms. Charette said Canada has already made significant concessions, including cancelling its digital services tax, which targeted global tech giants, and ending retaliatory tariffs imposed on U.S. goods after Mr. Trump first imposed levies on Canadian products in early 2025.
Canada, the U.S. and Mexico are entering a scheduled review of the USMCA. The agreement specifies that the three parties must meet on July 1 and agree to extend it for 16 years or start a process of annual reviews for 10 years, after which it would end.
Ms. Charette on Tuesday urged businesses to stay calm. She said Canada “could be facing some turbulence” ahead as Ottawa tries to preserve the existing USMCA – which allows most Canadian goods to enter the U.S. duty free – and resolve a series of U.S. tariffs that are damaging the steel, aluminum and auto sectors.
“We need to hold our nerve,” she said Tuesday, repeating earlier cautions from Mr. Carney last year that there may still be residual tariffs in place at the end of the process.
“It’s not clear that we are going to go back, necessarily, to the beautiful tariff-free existence we had.”