Any trade deal with Canada will include tariffs, says Trump's trade rep

U.S. President Donald Trump's point man on trade talks says Canada needs to accept that tariffs will be a part of any deal with the administration, including renewal of the Canada-U.S.-Mexico Agreement (CUSMA).

In interviews with two CBC News journalists on Capitol Hill just after Trump's state of the union address Tuesday night, U.S. trade representative Jamieson Greer suggested Canada can't expect to land a trade agreement that is free of tariffs.

"When we go to other countries, and we make a deal with them ... they agree that we can have a tariff on them," Greer told CBC News correspondent Katie Simpson.

"If Canada wants to agree that we can have some level of higher tariff on them while they open up their markets to us on things like dairy and other things, then that's a helpful conversation."

It's the clearest signal yet from the Trump administration that it's aiming for a fundamental rewrite of the free-trade deals that have existed between the U.S., Canada and Mexico since NAFTA took effect in 1994.

CUSMA is up for review this year, and the Trump administration has already imposed a raft of tariffs on Canadian exports, including on steel, aluminum, softwood lumber and the auto sector.

Each of the three countries must indicate by July 1 whether they want to extend the agreement, renegotiate its terms or let it expire.

Canada and the U.S. have yet to launch formal talks on the trade deal, although Prime Minister Mark Carney's government has indicated negotiations will start within a few weeks.

Greer, expected to be a key figure in those negotiations, indicated the Trump administration does not want to renew CUSMA as-is because the agreement — signed by Trump in 2018 — did not do enough to bring industrial production to the U.S.

"We're quite focused on reshoring supply chains related to automotive, steel and aluminum," Greer said. "That's what we're focused on."

He said that after the agreement was signed, the number of cars the U.S. imported from Mexico increased and the U.S. wants to make sure CUSMA rules are not violated if the trade pact endures.

"If you want to have that deal, you need to have better rules, stricter rules," he said.

"We don't want a situation where countries like Vietnam or China can send a bunch of stuff to Canada, do a screwdriver operation and send it across the border into the United States duty-free."

He also criticized Canada for failing to agree to U.S. requests to back off from "practices that we think are unfair," including measures that Canadian governments imposed last year in retaliation against Trump's tariffs.