Canada is prepared to make some concessions to the United States, including ending provincial bans on American alcohol, in exchange for relief from new U.S. tariffs, according to sources familiar with the talks.
U.S. President Donald Trump has threatened to impose a new 50 per cent tariff on hundreds of Canadian imports starting Aug. 19. He has pointed to concerns over Canada’s alcohol bans, dairy import rules and auto tariffs.
Canadian officials are considering lifting retaliatory tariffs on U.S. vehicles and making changes to Canada’s dairy import system, the sources said. In return, Canada wants the U.S. to drop the new 50 per cent tariffs and reduce tariffs on industries such as steel, aluminum, lumber and autos.
Canada is also seeking a joint announcement that talks on the Canada-United States-Mexico Agreement, or CUSMA, will resume in the fall.
The alcohol bans were introduced by several provinces after Trump first threatened tariffs last year. American wine, beer and spirits sales in Canada dropped sharply after the bans were put in place.
Some premiers have opposed bringing American alcohol back to provincial liquor store shelves. B.C. Premier David Eby previously said there was “not a chance in hell” U.S. alcohol would return to shelves.
Prime Minister Mark Carney has said decisions about alcohol sales are ultimately up to the provinces, but suggested the issue could be part of a larger trade agreement.
Canada-U.S. Trade Minister Dominic LeBlanc and Canada’s chief trade negotiator Janice Charette met with U.S. Trade Representative Jamieson Greer in Washington on Thursday. LeBlanc described the meeting as “constructive and detailed.”
Both countries are expected to hold daily discussions ahead of the Aug. 19 deadline.
Carney said Canada is seeking a broader deal covering key industries, including autos.
“We’re interested in a more comprehensive deal, a global deal that addresses the strategic sectors,” Carney said Thursday.
He added that Canada wants a clear path toward an agreement, even if a full deal is not reached by Aug. 19.
The sources said U.S. negotiators have indicated that some sector-specific tariffs may remain, even if progress is made on other trade issues.
