Carney links Trump’s latest tariff threat to negotiations on CUSMA trade pact

The Canada-U.S.-Mexico-Agreement on trade, known as CUSMA, was negotiated during the first Trump administration and served as an early stress test for Ottawa.

There were tensions during the talks and Trump repeatedly threatened to impose tariffs, but ultimately the agreement, which replaced the North American Free Trade Agreement, was signed and all three countries hailed it a success.

The trade agreement’s future is much less certain now, as Canada, Mexico and the United States prepare for the mandatory review. Trump said earlier this month the trade deal was “irrelevant” to him.

The president previously called the deal “transitional” and, during a meeting with Carney at the White House last October, Trump said it may have served its purpose.

Despite the president’s angry social media outbursts over the weekend, Canada-U.S. Trade Minister Dominic LeBlanc said he had a cordial and lengthy phone conversation with Trump’s trade czar on Sunday.

LeBlanc said he was reassured when U.S. Trade Representative Jamieson Greer indicated a clear desire to work on the CUSMA review. LeBlanc said he told Greer Ottawa is ready to have detailed conversations quickly, and they committed to holding a call later this week and to meeting in person soon.

Greer himself has expressed skepticism about the continental trade agreement. Greer previously said the Trump administration is also considering splitting up the three-way pact and negotiating separate deals with Canada and Mexico.

Carney said he expects the CUSMA review to be “robust.” Trump’s public comments over the past year show Canada shouldn’t expect a smooth ride through the process.

Trump originally expressed support for Ottawa’s agreement with China but he changed his tune after Carney’s widely praised speech at the World Economic Forum in Davos, Switzerland, last week.

In his comments, which were later cited by European leaders, the prime minister warned that the old world order is dead and urged middle powers to band together as larger ones try to pressure them through economic coercion.

Carney said Monday that his WEF comments were a recognition of how the world has changed and “Canada had understood the scale of the change” well before other countries.

In the days after the speech, members of the Trump administration warned Ottawa’s recent deal with China could upend the CUSMA review.

LeBlanc said he explained to Greer that Canada is committed to the CUSMA provision that forbids the three partner nations from entering into free-trade agreements with non-market economies such as China. LeBlanc said Greer understands Canada’s narrow agreement with Beijing sorts out long-standing trade tensions over electric vehicles and agricultural products.

CUSMA has shielded Canada and Mexico from the worst impacts of Trump’s tariffs. The president increased duties on Canada to 35 per cent last August, citing the cross-border flow of deadly fentanyl as justification. Those tariffs do not apply to goods compliant with CUSMA.

Canadian industries are also being slammed by separate tariffs on goods like steel, aluminum, automobiles, lumber and cabinets.

Ottawa’s efforts to find a tariff off-ramp were curtailed in October after Trump was angered by an Ontario government-sponsored advertisement quoting former president Ronald Reagan criticizing tariffs.

Ottawa’s EV deal with China also received pushback from Ontario Premier Doug Ford but the prime minister and provincial leader met in Toronto later Monday to show national unity.

“We’re a big family, and sometimes brothers and sisters may disagree,” Ford said. “But at the end of the day, make no mistake about it, we are one country, we are Team Canada, both of us.”

Ford later met at the legislature with Industry Minister Mélanie Joly and the two agreed to form an auto task force involving their two governments.

“The idea of this auto task force will be about looking at future strategic investments, making sure also that we protect our workforce, and particularly our unionized workforce,” Joly said.

The auto strategy will address aspects of the sector such as electrification and EV sales mandates, but also foreign direct investment from China, she said, noting she has had discussions with Chinese automakers.

“We’re definitely looking at making sure that there’s a local supply chain like the premier mentioned,” she said.

“The amount of 49,000 Chinese EVs starting March 1st, when it comes to that, we will come up with the different conditions linked to it in the coming weeks.”

This report by The Canadian Press was first published Jan. 26, 2026.

— With files from Kelly Geraldine Malone in Washington and Allison Jones and Liam Casey in Toronto

Kyle Duggan, The Canadian Press

by The Canadian Press

Carney links Trump’s latest tariff threat to negotiations on CUSMA trade pact

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