Ambassador Hoekstra delivers sobering news to Canada that some tariffs may remain in place despite ongoing negotiations and improving U.S.-Canada relations under the Trump administration.
Key Takeaways
- The U.S. and Canada are pursuing a two-phase negotiation approach on trade issues, focusing first on immediate concerns like tariffs before broader agreements.
- Ambassador Pete Hoekstra has stated that while he’s optimistic about reaching an agreement soon, some U.S. tariffs on Canadian goods may remain in place.
- The U.S. currently imposes three sets of tariffs on Canada covering border security, steel and aluminum, and automobiles.
- President Trump views the USMCA as “transitional” and prefers bilateral agreements over multi-country pacts.
- Key U.S. priorities include addressing fentanyl trafficking, bolstering defense cooperation, and keeping Chinese components out of North American supply chains.
Tariff Negotiations Underway But Complete Removal Uncertain
U.S. Ambassador to Canada Pete Hoekstra has expressed cautious optimism about reaching a trade agreement with Canada while making it clear that some tariffs might remain in place. In recent statements, Hoekstra acknowledged the complicated nature of the three sets of tariffs currently imposed on Canada, which cover border security and fentanyl trafficking, steel and aluminum, and automotive imports. The ambassador’s comments signal the Trump administration’s firm stance on protecting American interests while still seeking improved relations with its northern neighbor.
“I’m not sure they’ll be totally removed,” said Peter Hoekstra, U.S. Ambassador to Canada.
The 25% tariff on Canadian imports was imposed by President Trump in March, citing concerns about fentanyl entering the United States, despite data showing that less than 1% of fentanyl seized by U.S. Customs and Border Protection comes from the U.S.-Canada border. Hoekstra’s statements reflect the Trump administration’s broader approach to trade negotiations, which he described as “holistic” – considering tariffs alongside market access, non-tariff barriers, and government subsidies as part of a comprehensive strategy to protect American interests.
Two-Phase Approach to Avoid Premature USMCA Review
Canadian and U.S. officials have agreed to a two-phase negotiation strategy that focuses initially on easing tensions over tariffs and stabilizing trade relations before moving to broader agreements. This approach deliberately avoids a formal review of the Canada-U.S.-Mexico Agreement (CUSMA), which isn’t scheduled until 2026. President Trump has not committed to preserving CUSMA as a three-country pact and has expressed a clear preference for bilateral agreements, similar to recent U.S.-U.K. trade discussions.
“Whether there’s a possibility of that [CUSMA review] being advanced is not really under discussion right now,” said Kirsten Hillman, Canadian Ambassador to the U.S.
The current talks involve U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick negotiating with Canadian officials. Key issues include eliminating tariffs on steel and aluminum, addressing Canada’s Digital Services Tax (which the U.S. has criticized), and discussing ways to protect Canadian goods from tariffs imposed on national-security grounds. The discussions could also lead to preferred-customer agreements for critical commodities and joint efforts to keep certain Chinese components out of North American supply chains.
Improving Relations Despite Ongoing Challenges
Despite the tariff uncertainties, Hoekstra has emphasized the Trump administration’s desire for a positive relationship with Canada. The ambassador cited the respectful and forward-looking meeting between President Trump and newly elected Canadian Prime Minister Mark Carney, where they discussed security concerns, fentanyl trafficking, Arctic issues, and China. This marks a shift in tone from Trump’s previous comments about Canada potentially becoming the 51st state – remarks that Carney specifically asked Trump to avoid in their recent meeting.
“I think the president wants a very positive relationship,” said Peter Hoekstra, U.S. Ambassador to Canada.
Hoekstra, who was confirmed as U.S. envoy to Canada just last month, brings a fresh perspective to the bilateral relationship at a critical time. While acknowledging that tough negotiation issues remain, he expressed hope that the two countries can reach an agreement “relatively quickly.” The success of these negotiations will largely depend on Canada’s willingness to address U.S. concerns about supply management for dairy and poultry, digital services taxation, and security cooperation – all issues that the Trump administration has identified as priorities for strengthening the bilateral relationship.
