Canada optimistic North American free trade pact will survive
Dominic LeBlanc, Ottawa's minister for Canada-US trade, also cast doubt on the notion that Trump could ditch the agreement entirely, something the president has reportedly weighed as tension with Canada has mounted.
"I'm not pessimistic about the trilateral framework renewing," LeBlanc told the Canadian Club of Toronto, referring to the United States-Mexico-Canada agreement, which Trump signed and praised during his first term.
LeBlanc noted that when Trump announced new global tariffs last week to replace the levies invalidated by the US Supreme Court, the White House swiftly confirmed USMCA compliant goods would remain tariff exempt.
"They're doing that because it's in the American economic interest to do that," LeBlanc said.
'Not a renegotiation'
Under the originally agreed terms, the USMCA is to be reviewed in July.
Trump has called the deal "irrelevant" and said it was offering "no real advantage" to the United States.
US media have reported that he is considering scrapping the deal while seeking a separate arrangement with Mexico, a plan that has reportedly gained momentum since Canadian Prime Minister Mark Carney delivered a searing critique of US leadership at the World Economic Forum last month.
"The review is not a renegotiation," LeBlanc said, underscoring that the deal does not expire until 2036.
"If there's no consensus in the review, the agreement continues on."
LeBlanc also said that Trump's dismissive rhetoric about the USMCA does not match his trade team's posture.
"There is a public prosecution of the argument, the political argument, in the United States, and there are the private government to government to government conversations which are not discouraging."
LeBlanc said he expected to meet with US Trade Representative Jamieson Greer in Washington next week and believed the United States was ready to be specific about their desired USMCA adjustments.
"We're ready for those conversations," he told the Canadian Club.
Free trade with the United States is crucial to the Canadian economy.
Trump's sector specific tariffs targetings autos, steel, aluminum and lumber have caused significant economic pain in Canada.
But Trump's broad adherence to the USMCA has left about 85 percent of two-way trade tariff-free, sparing Canada from crippling economic turmoil.
Carney was flying to India on Thursday to seek closer trade ties, as part of his strategy to backstop Canada's economy should free trade with the US collapse.