Canada's Upcoming Trade Negotiations Might Impact Prices for Vehicles and Cheese | Carscoops

      The formal review of USMCA will commence in January as the United States and Canada prepare to renegotiate tariffs, trade access, and essential industry protections.

      The USMCA, which became effective in July 2020, has been in place for five and a half years.

      Canada intends to safeguard its agricultural sector during the negotiations.

      Tariff discussions will be part of the USMCA review.

      As underlying tensions persist between these close trading allies, a crucial agreement that influences billions in cross-border trade is set to return to the negotiation table.

      Next month, the United States and Canada will initiate a review of their free trade agreement. The outcomes of these discussions could significantly impact both countries, as well as Mexico, especially following a year characterized by reciprocal trade measures since Trump initiated tariffs on numerous goods earlier this year.

      Reassessing the Trade Relationship

      Last week, Canadian Prime Minister Mark Carney announced that government officials would convene with their U.S. counterparts in mid-January "to launch formal discussions." The United States-Mexico-Canada Agreement (USMCA), which was signed in late 2018 and came into effect in July 2020, includes a clause for a formal review in 2026.

      US Trade Representative Jamieson Greer expressed ongoing concerns regarding access to Canada’s dairy market, particularly related to certain exports of dairy products, as reported by CBC.

      He also raised issues with provincial restrictions in Canada on the distribution of American alcohol, which were enacted in direct response to tariffs imposed during the Trump administration.

      Prime Minister Carney emphasized Canada’s commitment to safeguarding its agricultural industry and mentioned that he sees “tremendous benefits” in collaborating with the U.S. across various sectors including automotive, steel, aluminum, and forestry. “We will engage in the review discussions of [USMCA] with that mindset,” he stated.

      Can Common Ground Be Achieved?

      Trade talks between the US and Canada began a few months ago, but President Trump abruptly halted them after the Ontario provincial government launched an anti-tariff campaign.

      Carney noted that the negotiations were close to reaching an agreement on tariff reductions for several sectors, including steel, aluminum, and energy, prior to their cancellation. Those discussions regarding tariff relief are now anticipated to be incorporated into the broader USMCA renegotiation process.

      Canada’s economy relies significantly on trade, with approximately 75 percent of its exports directed to the United States. It is also recognized as the leading export market for 36 U.S. states. Daily, about $2.7 billion in goods and services crosses the US-Canada border.