LeBlanc offers ‘specific proposals’ to end trade war, calls for 16-year USMCA renewal

Open this photo in gallery:

Intergovernmental Affairs Minister Dominic LeBlanc says he presented “a number of specific proposals” for ending Donald Trump’s trade war with Canada in a meeting with the U.S. President’s top negotiator on Tuesday. He also called for the U.S.-Mexico-Canada Agreement, which governs continental trade, to be renewed for another 16 years.

But the U.S. continued to keep Canada out of formal USMCA review discussions it is holding with Mexico – while Mr. Trump revived his threats of annexation.

Speaking at the Canadian embassy in Washington, D.C., after a sit-down with U.S. Trade Representative Jamieson Greer, Mr. LeBlanc said trade negotiations are gathering steam.

“We are continuing to deepen the level of detail in the conversations and that’s what’s important,” he said. “It wasn’t a high-level discussion. We went into detail on the issues that concern the Americans.”

Mr. LeBlanc declined to say what specifically he and Janice Charette, Canada’s chief trade negotiator, proposed to Mr. Greer.

North American-made autos must contain at least 50% U.S. content, Trump negotiators tell Mexico

In a Truth Social post the night before the meeting, Mr. Trump wrote “51^st State!” over a link to a story about the weakness of the Canadian economy. Pete Hoekstra, the U.S. ambassador to Canada, posted a screenshot of Mr. Trump’s message to X.

Prime Minister Mark Carney shrugged off the dig. “The President is an exceptionally active user of social media,” he told reporters at a Tuesday afternoon press conference near Montreal. “It’s only gone up in recent months, and we’re not going to respond or react to everything that he posts.”

Earlier in the day, Mr. Carney said the U.S. has about 30 different trade issues with Canada and nearly 60 with Mexico.

Some are “fundamental structural issues,” such as Mr. Trump’s tariffs on autos, steel, aluminum and softwood lumber, Mr. Carney said. Others are unrelated to trade, such as defence spending. “We’re trying to find a new partnership with the U.S. in strategic areas,” the Prime Minister said before a morning cabinet meeting in Ottawa.

Washington is also complaining about a wide range of other irritants, such as Canadian dairy quotas and Ottawa’s regulations on video streaming companies.

The U.S. has opened a formal USMCA review with Mexico, but so far has not done the same with Canada – an apparent attempt to replicate a divide-and-conquer negotiating strategy it used during trade talks in Mr. Trump’s first term.

In a letter to Mr. Greer and Mexican Economy Minister Marcelo Ebrard before the meeting on Tuesday, Mr. LeBlanc wrote that “Canada recommends renewal” of the USMCA before the July 1 deadline by which the countries must decide whether to re-up the deal or renegotiate it.

Officials from all three countries have said they expect negotiations to continue beyond July 1, making a 16-year extension highly unlikely. Absent the renewal, USMCA would remain in force with annual reviews for another 10 years. If no extension agreement is reached, the pact would then expire. Each of the countries can also withdraw from USMCA with six months’ notice.

Mr. Greer has indicated that he wants to cut separate bilateral deals with each of Canada and Mexico that address Mr. Trump’s priority issues, such as autos and steel, which would be layered on top of USMCA.

At the first round of U.S.-Mexico talks last week, Mr. Greer demanded that all North American-made autos contain at least 50 per cent U.S. content, a protectionist measure that Mexico and Canada have roundly rejected in the past.

Ms. Charette on Tuesday said Ottawa is co-ordinating with Mexico City to make sure the Mexicans don’t agree to anything with the U.S. that “undercuts” Canada. She acknowledged that the outcome of negotiations is unlikely to be a return to the tariff-free days before Mr. Trump’s trade war.

The aim is “the lowest possible tariffs on the narrowest basket of goods with the most market access for Canadian products,” she said.

Canada and the U.S. negotiated for months last year as Ottawa sought to have Mr. Trump’s tariffs removed. But the President walked away from talks last October, citing an Ontario government anti-tariff ad featuring Ronald Reagan, the godfather of U.S. free trade.

Carney attributes ‘weakness’ in economic data to lower immigration targets

One Canadian trade official who recently spoke with U.S. counterparts said the Americans characterized negotiations with Canada as a roller-coaster, with moments of movement towards a deal, contrasted with moments in which the Trump administration became frustrated by what it saw as an intransigent approach. The Globe and Mail granted the official anonymity to gain insight into closed-door talks.

Ahead of Mr. LeBlanc’s meeting with Mr. Greer on Tuesday, a delegation of Manitoba industries met with some of Mr. Greer’s subordinates.

Richard Madan, the province’s representative in the U.S. capital, said after the sit-down that there was “some optimism that a deal is in sight” to end the trade war. It was clear from American officials, however, that Mr. Trump’s threat to pull out of USMCA is still on the table, he said.

“They signalled that, even though the President signed the agreement six years ago, he’s not attached to it,” Mr. Madan said outside the Winder Building, which houses Mr. Greer’s offices, near the White House.

Chuck Davidson, CEO of the Manitoba Chambers of Commerce, said U.S. officials complained during the meeting about Canadian provincial governments, including Ontario and Manitoba, removing U.S. products from liquor stores in retaliation for Mr. Trump’s tariffs. The Americans also raised Canada’s deal to lower tariffs on Chinese electric vehicles in exchange for lower Chinese tariffs on canola.

Mr. Davidson said it is likely any deal with the U.S. will leave at least some of Mr. Trump’s tariffs in place, but that Canada could still aim to get “the best deal of any country,” given that the President’s trade war is hammering nearly every nation in the world.

“I don’t think there is a no-tariffs situation,” he said. “Would it be great if there were no tariffs and it was back to the way things were? Absolutely. Is that a reality? It doesn’t seem like that’s on the horizon.”

Other Canadians were less sanguine. Ontario Premier Doug Ford on Tuesday blasted Mr. Trump’s latest “51st state” jab. “Enough of the nonsense ... rubbish, I should say, from President Trump,” he said at the legislature. “I get tired of that guy.”

With reports from Laura Stone in Toronto, and Shannon Proudfoot and Marieke Walsh in Ottawa