Trump’s ambassador predicts a new Canada-U.S. trade deal is possible, but warns tariffs are likely to remain despite hopes for smoother relations.
A New Trade Deal on the Horizon—With a Tariff Twist
The U.S. ambassador to Canada, Pete Hoekstra, has delivered a mixed message to Canadians: while a fresh trade agreement with the United States could soon be within reach, Canadians should not expect a return to fully tariff-free trade. Speaking at the Mackinac Policy Conference in Michigan, Hoekstra expressed optimism about the potential for a new deal that could benefit both countries, but he was clear that tariffs are here to stay.
“The president and the prime minister would like to reach a resolution sooner rather than later,” Hoekstra told the conference, projecting a stronger Canada-U.S. relationship ahead.
Tariffs: The New Normal in North American Trade
Hoekstra emphasized that President Trump’s administration is unlikely to remove all tariffs, even for close allies. He pointed to the automotive sector as a key area where Canada and the U.S. should collaborate to compete with China, but warned that no country—including Canada—should expect zero tariffs when trading with the U.S. .
Currently, Canada benefits from exemptions to some of the broad tariffs imposed on other countries, such as the 10% levy, but still faces 25% tariffs on steel, aluminum, and certain products not covered by the Canada-U.S.-Mexico Agreement (CUSMA). Hoekstra suggested that, depending on negotiations, Canada could secure the lowest tariff rates of any U.S. trading partner, but total elimination is off the table.
Anti-American Sentiment and Political Tensions
Alongside trade, Hoekstra voiced concern over what he described as rising anti-Americanism in Canada. He criticized recent bans on U.S. liquor sales in some provinces and lamented the lack of pro-American voices in Canadian politics and business circles. According to Hoekstra, both major Canadian political parties have recently campaigned on platforms critical of Trump and the U.S., complicating efforts to rebuild trust.
Negotiations in Two Phases
Trade talks between Ottawa and Washington are expected to unfold in two stages: first, resolving a limited set of disputes, followed by broader negotiations to update the CUSMA agreement later this year. While both sides are eager for a resolution, recent events highlight that even the ambassador’s predictions can be at odds with President Trump’s shifting positions, especially on sensitive topics like annexation and defense cooperation.
The Bottom Line
Despite the hurdles, Hoekstra remains confident that Canada and the U.S. can reach a mutually beneficial agreement—albeit one where tariffs are a permanent fixture. As both governments push for economic growth and stability, the shape of North American trade will depend on finding common ground in a climate marked by political friction and evolving global competition.
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