The Canadian government has expressed its readiness to engage in early discussions on reviewing the United States-Mexico-Canada Agreement (USMCA) if the Trump administration initiates the process, according to Finance Minister Dominic LeBlanc. The agreement, which has governed North American trade since 2020, is scheduled for an official review in 2026, but the US may seek an earlier renegotiation amid escalating trade tensions.

Speaking to Bloomberg News, LeBlanc emphasized that Canada prefers a broad-based negotiation that resolves multiple trade disputes simultaneously, rather than a “sector-by-sector, week-by-week” approach. “If the American administration indicated to us that they wanted to advance that date and have those conversations, we would be ready,” LeBlanc stated, highlighting shared interests among the three North American nations.

Rising US-Canada Trade Tensions Over Tariffs

The minister’s statement comes at a time of significant turmoil in North American trade relations. This week, the United States imposed 25% tariffs on most goods from Canada and Mexico, a move that prompted swift retaliation from Prime Minister Justin Trudeau’s government. In response, Canada slapped tariffs on C$30 billion worth of US-made goods, further straining economic ties.

Trudeau, who is set to step down as Prime Minister, has openly criticized Trump, suggesting that the US tariffs are aimed at economically weakening Canada. He went so far as to claim that Trump’s “ultimate goal” could be to annex Canada.

Trump, however, escalated the situation further, stating on Friday that “Canada has been ripping us off for years on tariffs for lumber and dairy products.” His remarks fueled speculation about another potential round of tariffs, particularly targeting Canada’s dairy and lumber industries.

Canada Aligns with US on China Dumping Measures

Beyond USMCA, Canada is also working with Washington to implement stronger trade measures against China, particularly regarding steel, aluminum, and electric vehicles (EVs). The Canadian government imposed tariffs on Chinese imports last year, largely in alignment with US policies. Mexico’s President Claudia Sheinbaum recently stated that her country would also review tariffs on Chinese shipments, signaling a coordinated North American response to China's trade practices.

LeBlanc acknowledged the importance of ensuring fair competition in the region, stating that Canada remains committed to preventing China from dumping cheap goods into the North American market. He indicated that talks with the US are ongoing to determine further trade restrictions.

USMCA: A Brewing Trade War or Path to Stability?

As tensions rise, Canada is focused on preserving the USMCA framework while ensuring fair trade relations with both the US and Mexico. LeBlanc confirmed that his discussions with US Commerce Secretary Howard Lutnick have been cordial and constructive, despite Trump’s heated rhetoric.

However, uncertainty looms as another trade war deadline approaches. Trump has warned that the US will impose 25% tariffs on foreign steel and aluminum next week, citing national security concerns. LeBlanc remains hopeful that negotiations could prevent these tariffs, stating, “I’m not yet that pessimistic that they’re going to be imposed.”

Leadership Change in Canada: What’s Next?

With Trudeau stepping down, Canada’s trade policy could see a shift under new leadership. LeBlanc has openly endorsed Mark Carney, the former central banker, as the next leader of the Liberal Party. Carney’s stance on trade relations with the US, China, and Mexico will play a critical role in shaping Canada’s economic future.

As the political landscape evolves, the US-Canada trade relationship remains at a crucial juncture, with USMCA talks, China trade policies, and retaliatory tariffs all in focus. The coming months will determine whether Canada and the US can find common ground or if the ongoing trade disputes will escalate further.