Canada and United States to launch formal talks to review USMCA in mid-January

Canada and the United States will launch formal discussions in mid-January to review their free-trade agreement, the office of Prime Minister Mark Carney said Friday. The talks will focus on the United States–Mexico–Canada Agreement, or USMCA, which is set for a 2026 review under a renegotiation clause included when the deal was struck during Donald Trump’s first term. The prime minister confirmed to provincial leaders that Dominic LeBlanc, Canada’s point person for U.S.-Canada trade relations, “will meet with U.S. counterparts in mid-January to launch formal discussions,” Carney’s office said in a statement late Thursday.

LeBlanc’s forthcoming talks will kick off a formal process aimed at revisiting the terms of their trade relationship. Canada remains one of the world’s most trade-dependent economies, with more than 75% of its exports going to the United States. Yet, under the USMCA framework, most exports to the U.S. are currently exempted from tariffs, a point Canada has emphasized in recent diplomacy.

The decision to open formal talks comes after a period of tension between the two neighbors. In October, U.S. President Donald Trump halted ongoing discussions as he pressed for tariff relief in several sectors, following an Ontario government anti-tariff advertising campaign in the United States. The move followed a spring characterized by friction, including Trump’s past suggestion that Canada should become the 51st U.S. state. Carney said earlier this week that Canada and the United States were close to achieving sectoral tariff relief in multiple areas, including steel and aluminum, though no final agreement had been announced.

Tariffs remain a key sticking point for several Canadian industries, notably aluminum, steel, autos and lumber. Trade irritants flagged this week by U.S. Trade Representative Jamieson Greer are viewed as elements of a broader, “much bigger discussion” about continental trade, with a coming review of USMCA expected to focus on broader U.S. concerns about Canadian policies on dairy products, alcohol and digital services.

Context matters: Canada is the top export destination for 36 U.S. states, and nearly CAD 3.6 billion (about US$2.7 billion) worth of goods and services cross the border daily. About 60% of U.S. crude imports come from Canada, and 85% of U.S. electricity imports are Canadian. Canada is also the largest foreign supplier of steel, aluminum and uranium to the United States and holds 34 critical minerals and metals that the Pentagon has shown interest in for national security purposes.

Carney stressed that access to Canada’s critical ministers is not a guaranteed concession for Washington. “It’s a potential opportunity for the United States, but it’s not an assured opportunity for the United States. It’s part of a bigger discussion in terms of our trading relationship, because we have other partners around the world, in Europe for example, who are very interested in participating,” he said earlier Thursday.

Looking ahead, Carney and the provincial premiers agreed to meet in person in Ottawa early in the new year to receive updates on trade talks and to chart next steps with U.S. officials as the two countries pursue the next phase of their long-standing economic relationship.