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Canada’s minister for trade Dominic LeBlanc believes Canada still has leverage in talks with the U.S. and remains optimistic a deal can be reached.Sean Kilpatrick/The Canadian Press
Canada’s minister for trade with the United States says he’s still hoping to make progress on reducing or eliminating U.S. tariffs on sectors such as steel and aluminum before a formal review of the North American trade pact commences.
Dominic LeBlanc told the Senate foreign affairs committee Thursday that he believes Canada still has leverage in talks with the U.S., despite dropping retaliatory levies and scrapping the digital services tax that President Donald Trump opposed.
He said he remains optimistic that a deal can be reached with the U.S. to resolve or reduce trade irritants, but he cautioned that not everything will be solved.
“Some challenges will remain for some time,” Mr. LeBlanc told the committee.
He was asked what power or influence Canada has in talks with the U.S. now that it has dropped countertariffs and the DST, which would have hit U.S. tech giants.
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The minister said the U.S. is seeking Canada’s “enhanced co-operation” on some matters – which he declined to identify – but said the other matter in Ottawa’s favour is domestic U.S. pressure for relaxing tariffs on Canadian products. American companies that rely on steel, aluminum or autos from Canada will be bending the President’s ear.
“There are common interests – might be a more-gentle word – that we have with the Americans,” Mr. LeBlanc said.
“If you’re the CEO of Ford Motors and all of your Ford F-150 and F-250 trucks are made with Canadian aluminum imported into the manufacturing facility in the United States, it’s an inflationary pressure on those trucks.”
Mr. Trump has imposed a number of sectoral tariffs that affect Canada disproportionately, including a 50-per-cent tariff on steel and aluminum and a 25-per-cent tariff on automobiles, with a carve-out for U.S. parts. And on Monday, he imposed a new 10-per-cent tariff on Canadian softwood shipments to the United States, raising the total levies on softwood from Canada to more than 45 per cent.
Mr. LeBlanc said he’s been telling U.S. Secretary of Commerce Howard Lutnick that it’s in the U.S.’s interest to have a strong Canadian steel and aluminum industry to supply the U.S. defence sector.
He said he asks Mr. Lutnick, “How can it not be in the national security of the interest of the United States to have a thriving and viable Canadian steel and aluminum industry?” He added that he thinks in those conversations “there’s an acknowledgement that that basic premise is true.”
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Later Thursday, the minister vowed before a House of Commons committee that Canada would not abandon its protectionist supply-management system that shields a number of industries including dairy from significant foreign competition.
He was asked about a Globe and Mail story that reported Ottawa is considering changes that would allow more U.S. dairy products on Canadian store shelves, in an effort to address one of Washington’s most significant bilateral trade irritants.
“There will not be an increase of quotas,” the minister told the House committee. The Globe story however said Canada is considering changing how it allocates licences for quota-free access to Canada’s dairy market rather than increasing the overall access given to American producers.
The minister was also asked what the U.S. had granted to Canada by way of compromise when Ottawa had not only scrapped the digital services tax but ended retaliatory tariffs.
Mr. LeBlanc, as an example, cited the U.S. decision to allow Canadian exports compliant with the United States-Mexico-Canada Agreement to be exempt from the broadly applicable tariffs originally announced by Mr. Trump in February and enacted in March
The three countries are preparing for a scheduled review of the USMCA trade pact in 2026 that is expected to lead to demands from Washington to renegotiate some sections.
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Mr. LeBlanc earlier told the Senate foreign affairs committee that he’s not heard any suggestion from the U.S. that talks over sectoral tariffs on steel, aluminum, autos or softwood be merged into the USMCA review.
“Nobody has yet suggested we fold it into the CUSMA review,” he said, referring to an alternate name for the USMCA. “We would hope that we might make progress before that.”
Mr. LeBlanc also defended Canada’s March, 2025 decision to impose retaliatory tariffs on the United States – levies that Prime Minister Mark Carney repealed in August.
He said that in the initial aftermath of the original 25-per-cent tariff – now 35 per cent – that Mr. Trump levied on Canada, it wasn’t clear that goods exported according to the rules of the USMCA were going to be exempt as they are now.
Mr. LeBlanc also noted that the European Union was originally talking of similar retaliation – countertariffs that were eventually delayed and never applied.
“It’s an interesting political science or public-policy class to wonder, or to look back on those hour-by-hour decisions,” the minister said, before adding that ultimately, he thinks “Canadian public opinion wanted the government to respond.”
The minister was asked at the Senate committee whether Ottawa subscribes to the Trump administration’s hopes to build a “Fortress North America” with a common tariff on countries such as China?
Mr. LeBlanc deferred to Rob Stewart, deputy minister of international trade. Mr. Stewart said that not only the United States but Canada, Mexico and the European Union all have “problems with the way that the Chinese economy is operating, and the issues of oversupply and subsidization” by Beijing that have forced countries including Canada to take measures to protect themselves.
“This is not a Fortress America issue. This is a Chinese economy issue,” Mr. Stewart said.
