Trump Trade Chief Says U.S. Is Open to Canada Talks — But Tariffs Aren’t Going Away

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The door to renewed Canada-U.S. trade talks is still open, but Washington is making clear that walking through it would not restore the relationship Canadians knew before the current tariff fight.

U.S. Trade Representative Jamieson Greer said the Trump administration remains willing to negotiate with Canada and is in frequent contact with Canada-U.S. Trade Minister Dominic LeBlanc. At the same time, Greer indicated the United States is not contemplating simply eliminating tariffs as part of a new arrangement. The distinction matters. Washington increasingly treats tariffs not merely as temporary negotiating leverage, but as an enduring part of its industrial and trade strategy. For Ottawa, that means the central question may no longer be whether tariffs disappear completely, but how much relief Canada can secure for its most exposed industries.

Washington Says Its Door Is Still Open

Greer’s latest comments offer one of the clearest signs that communication between the two governments has not stopped despite weeks of escalating measures. Speaking as G20 trade ministers gathered in Milwaukee, Greer said he remains in frequent contact with LeBlanc and indicated Washington would engage if Canada wanted a deal. Canadian International Trade Minister Maninder Sidhu also held an informal discussion with Greer during the G20 meetings, focusing partly on bilateral economic cooperation and uncertainty facing the auto industry.

But an open door should not be confused with urgency. Just days earlier, Greer said President Donald Trump was comfortable with the existing standoff and saw no immediate need to reach an agreement. That gives Ottawa a difficult negotiating environment: communication continues, yet Washington is publicly signalling that it does not believe current trade restrictions are imposing enough pressure on the United States to force a quick compromise.

Tariffs Are Becoming Part of the U.S. Trade Model

The larger message coming from Washington goes well beyond Canada. At the September 30 G20 trade gathering, Greer defended the administration’s combination of tariffs and bilateral trade deals as a way to reduce trade deficits, strengthen domestic supply chains and encourage American manufacturing. USTR has repeatedly described tariffs as one component of a broader economic strategy rather than simply a short-lived tactic used to extract concessions from individual countries.

That makes Canada’s challenge fundamentally different from previous trade disputes in which both sides could expect duties to disappear once an agreement was reached. The White House has also specified that some recent Section 338 duties on Canadian goods apply regardless of whether those goods otherwise qualify under CUSMA and can operate alongside separate Section 232 tariffs. Greer’s position therefore leaves room for negotiated reductions, exemptions or different treatment without committing Washington to a return to broadly tariff-free bilateral commerce.

New Import Bans Have Raised the Stakes

The dispute has already moved beyond ordinary tariffs in several sectors. On September 29, U.S. import bans took effect on specified Canadian products, including categories of alcoholic beverages, dairy products and motorcycles. Before the bans, some of the affected Canadian goods had faced additional duties of 50%. The White House says the restrictions were imposed under Section 338 of the Tariff Act of 1930 in response to what it describes as discriminatory Canadian trade measures. Canada disputes the broader U.S. characterization of its actions.

Ottawa has responded with its own measures. Beginning September 8, Canada imposed tariffs of 15%, 25% and 50% on approximately C$27.6 billion of U.S. imports, matching rates applied by Washington to affected Canadian goods. Canadian countermeasures target areas including steel, dairy, appliances, agricultural equipment, pulp and paper and electronics. The result is a dispute in which both governments now have measures that businesses would want addressed in any meaningful settlement.

CUSMA Remains in Force, but Its Future Is Unsettled

The trade fight is unfolding at the same time as a major institutional problem for North American commerce. On July 1, the United States declined to renew CUSMA for another 16-year term during the agreement’s scheduled joint review. USTR stressed that the decision did not terminate the agreement: CUSMA remains in force while the three governments continue discussing changes. Still, Washington’s refusal to renew the existing framework removed an important source of long-term certainty for businesses operating across the continent.

Greer subsequently told U.S. lawmakers that he hoped Washington could reach interim arrangements with Canada and Mexico before the end of 2026 while leaving more complicated CUSMA questions for 2027. Those issues include rules governing North American content, automobiles and broader economic-security concerns. The approach suggests Canada could potentially reach a narrower agreement with Washington before every disagreement surrounding CUSMA itself has been resolved.

Autos Remain One of Canada’s Biggest Vulnerabilities

Few industries demonstrate the stakes more clearly than autos. More than 90% of vehicles assembled in Canada and roughly 60% of Canadian-made auto parts are exported to the United States, according to the federal government. Canada produced more than 1.2 million passenger vehicles in 2025, while automotive manufacturing supports about 125,000 direct Canadian jobs. That dependence makes changes in U.S. market access particularly significant for communities across southern Ontario.

Existing U.S. tariffs have already complicated that relationship, and Trump has threatened another escalation. In August, he said tariffs could rise to 50% on Canadian cars, trucks and automotive parts beginning January 1, 2027. Whether that threat is implemented exactly as announced remains an open question, but it gives the auto file unusual importance in any renewed negotiations. Canada’s objective has been to reduce U.S. sectoral tariffs while preserving preferential access for Canadian production.

Steel Shows Why Washington May Keep Tariffs

Steel offers another indication that tariffs are becoming embedded in U.S. industrial policy. At a September 30 meeting in Milwaukee, Greer chaired the Global Forum on Steel Excess Capacity as participating economies adopted the new “Milwaukee Framework.” The OECD says global excess steelmaking capacity is projected to rise from about 601 million tonnes in 2024 to 745 million tonnes by 2028, intensifying concerns over subsidized production and distorted global markets.

Greer explicitly linked the administration’s steel strategy to tariffs, trade agreements, energy policy and domestic investment, arguing that such measures were strengthening American production. The framework encourages governments to consider stronger trade-remedy measures while reducing subsidies that sustain inefficient excess capacity. For Canadian producers, this matters because even cooperation with Washington on Chinese overcapacity would not automatically guarantee relief from American tariffs on Canadian steel. The administration increasingly views protective measures as compatible with cooperation among allies rather than necessarily contradictory to it.

Canada Is Retaliating While Cushioning Exposed Industries

Ottawa has paired its counter-tariffs with financial support intended to help workers and companies adjust. When Canada announced its latest response in August, the federal government unveiled C$7.5 billion in new and expanded support measures, on top of nearly C$25 billion it said had already been committed since U.S. tariffs began affecting Canadian industries. The measures are intended to help companies retool, find new customers and manage disruptions caused by reduced U.S. market access.

Those pressures are becoming visible in individual communities. Stelco recently announced layoffs affecting as many as 500 workers as it reorganized operations in Ontario, with the company citing declining demand and the continuing trade dispute among the factors behind the decision. More broadly, Canada’s manufacturing PMI fell from 53.0 in August to 51.5 in September. A reading above 50 still represents expansion, but the September figure was the weakest in six months and accompanied by weaker business confidence.

Canada Is Diversifying, but Replacing the U.S. Is Difficult

Canada has made measurable progress in selling more goods outside the United States. Statistics Canada reported that the U.S. accounted for 71.7% of Canadian merchandise exports in 2025, down from 75.9% in 2024. Exports to non-U.S. destinations rose 17.2% during 2025. That is a meaningful shift for a country whose trade patterns have historically been heavily shaped by proximity to the enormous American consumer market.

The trend continued into 2026. In July, Canadian exports to countries other than the United States increased 7.4% in a single month to a record C$25.6 billion. Non-U.S. destinations accounted for 33.7% of Canadian merchandise exports that month. Yet the numbers also illustrate the limits of diversification: the U.S. remains by far Canada’s largest individual export destination, and many industries were built around deeply integrated continental supply chains. Diversification can reduce exposure over time, but it cannot quickly recreate the scale, infrastructure and proximity of the U.S. market.

A Deal Could Reduce the Pain Without Eliminating Tariffs

The public positions of both governments suggest that any eventual agreement could involve several separate bargaining tracks rather than one sweeping return to the pre-dispute relationship. Washington has repeatedly raised concerns involving Canadian dairy rules, provincial treatment of American alcohol, automotive trade and other market-access issues. Within the wider CUSMA process, U.S. negotiators have also focused on tougher rules of origin, economic security and preventing goods or components from non-member countries from using North American supply chains to obtain preferential access.

For Canada, the stated objectives have included preserving tariff-free treatment for the majority of trade while significantly reducing duties on strategically important industries. Greer’s latest comments leave room for that type of negotiation. What they do not offer is a promise that tariffs disappear altogether. Washington’s message is increasingly consistent: it is willing to negotiate the terms of the trading relationship, but tariffs themselves have become part of the structure being negotiated.

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