When the prime minister pulled Canada’s negotiators back from Washington, CBC News reported, he cited last-minute American changes he called unworkable, including U.S. tariffs on medium- and heavy-duty trucks that bear on General Motors’ Silverado production in Oshawa and Ford’s planned F-250s in Oakville. At least six weeks later, formal talks “remain stalled,” according to the National Post, while Mexico keeps bargaining with Washington. Carney should send his negotiators back before Mexico’s next round is dated, and well before the United States closes its review consultation on Jan. 12, 2027.
That consultation is the frame for next year’s pressure on Canada. The Office of the U.S. Trade Representative opened public comment on the 2027 joint review on Oct. 2, “as directed by Congress.” The review starts from hostile ground, because at the July 1 meeting of the Free Trade Commission, Jamieson Greer, the U.S. trade representative, said that “the United States did not agree to renew the USMCA in its current form.” The agreement “remains in force pending resolution of these issues or until the Agreement’s termination,” which leaves Canadian access resting on a settlement Canada is not formally negotiating.
Mexico has kept negotiating. The National Post reports that signs of progress have come “mainly from the U.S.-Mexico trade teams,” and that Washington has opened the review “while maintaining bilateral engagement with Mexico — and not with Canada.” Marcelo Ebrard, Mexico’s secretary of economy, met Greer on the margins of the G20 trade ministerial on Oct. 1, and Mexican President Claudia Sheinbaum said on Oct. 9 that she wants the U.S. Section 232 tariffs on autos and steel lowered, according to the ICPA tracker, a trade-compliance industry chronology. Ebrard told El País afterwards that Mexico still needs the Section 232 rates on steel and vehicles cut.
I think whatever auto rate Washington settles with Mexico will come at Canada’s expense. Greer recently said. “We have a trade policy where we’re not inclined to go to zero tariffs because we’re trying to reshore,” he told reporters in Milwaukee, as CBC News reported. A government that rules out zero and then agrees a positive rate with one neighbour has priced what its reshoring aim will tolerate on North American vehicles, and a lower rate for the second neighbour would cut against that aim. Canada can still argue for better terms, but it will be arguing from a number it had no hand in setting.
The cost of the stall is already being paid in Canadian exports. Washington’s 50 per cent duties on certain Canadian alcohol, dairy, and motor-vehicle products took effect on Aug. 22, and the White House says they apply “regardless of whether a good originates under” the agreement. Carney's withdrawal removed the formal channel through which Canada could bargain them away. Desjardins Economic Studies, the bank’s economics department, warned in August that with tariffs on both sides unemployment could reach 7 per cent by the end of the year, up from 6.4 per cent in July. Canada has little room to trade around the problem, since Statistics Canada put the share of exports going anywhere other than the United States at 30.2 per cent in August.
The last time Mexico settled with Washington first, Canada bargained from Mexico’s terms. On Aug. 27, 2018, the United States and Mexico announced a preliminary deal that left Canada out, and on Sept. 30 Canada and the United States, in a joint statement issued by Robert Lighthizer and Foreign Affairs Minister Chrystia Freeland, who led Canada’s negotiations, said they had “reached an agreement, alongside Mexico.” The similarity is uncanny, with Mexico closing first on terms that set the frame for the sector that matters most to Ontario. The difference is that Freeland’s team stayed in the talks after the U.S.–Mexico announcement, so Canada reached agreement about five weeks later and argued its own chapters at the table, while Carney’s government has had no formal round since August and faces duties that sit outside the agreement entirely. The 2018 sequence shows that arriving second was survivable for a Canada that stayed at the table, which is the condition Carney’s government has not met since August.
Ottawa’s case is that the August walkout refused a bad deal combining the truck tariffs with language Carney said could limit Canada’s freedom to make trade deals with other countries and U.S. opposition to Canadian “discoverability” rules for French-language streaming content. Carney says Canada “stands ready to negotiate in good faith,” Greer speaks frequently with Dominic LeBlanc, the National Post reports, and technical talks continue. Carlo Dade of the University of Calgary School of Public Policy told the Post, “I wouldn’t read this as necessarily being sidelined,” and on that view any change to the agreement still needs all three parties.
That defence quickly falls apart since the clause that limits Canada's ability to make trade deals with other countries existed in the original USMCA, signed by Canada in 2018. It was not some new term the Trump negotiation team was bullying us into; it was an original article from the agreement. Further, the August walk-out does not justify the weeks of silence since. Distance has not narrowed the gaps. Greer still says “a handful of outstanding issues” are “quite difficult to resolve” and asks whether “Canada want[s] to get to ‘yes’ on some of these things.” Ottawa’s veto over the text also offers no protection against duties that apply regardless of the agreement, or against an auto rate settled bilaterally.
Carney should ask Greer for a formal round before Washington and Mexico fix the date of their next meeting. We gain nothing from this silence and risk losing everything by keeping it.
