Prime Minister Mark Carney has indicated that hopes for a near-term resolution on punishing U.S. tariffs targeting key Canadian industries have dimmed. Instead, the issue is now expected to be folded into the upcoming joint review of the continental trade pact.
Timeline Collapse Ends Hope for Quick Deal
Speaking at a news conference on Parliament Hill in Ottawa on Thursday, December 18, 2025, Carney stated that a separate, sectoral agreement to remove or reduce tariffs is now "unlikely." He was joined at the event by Ontario Premier Doug Ford, where they signed an accord to accelerate infrastructure project approvals.
The prime minister attributed the shift to a collapsed timeline. Negotiations with the United States were halted in late October when President Donald Trump broke off talks, despite Carney's claim that the two nations were "close" to reaching an agreement at that time. With both countries now turning their focus to the first mandated review of the Canada-United States-Mexico Agreement (CUSMA), set for 2026, there is insufficient time to finalize a tariff-specific pact.
Broader Trade Negotiations Loom in 2026
Carney confirmed that the tariff discussions are now expected to merge with the wider CUSMA evaluation process. "We believe that is now going to roll into the broader (CUSMA) negotiation," he told reporters. The trilateral trade deal, which replaced NAFTA, is scheduled for its first joint review starting July 1, 2026.
The abandoned tariff deal would have covered steel, aluminum, and energy sectors. U.S. Ambassador to Canada Pete Hoekstra recently revealed to the National Post that uranium was also part of the discussions. Hoekstra expressed optimism that talks would eventually restart, though timing remains uncertain.
U.S. Signals Review Could Lead to Withdrawal
The upcoming CUSMA review carries significant weight. Under the agreement's terms, the three partner nations can choose to extend the pact with modifications or withdraw from it entirely. U.S. Trade Representative Jamieson Greer has publicly confirmed that withdrawal remains a viable option.
Greer has already begun preparatory work, holding hearings this month on the agreement's performance. A transcript of his recent closed-door remarks to congressional committees outlined specific trade irritants he wants Canada to address during the 2026 review process.
While the door for a separate tariff agreement is not completely closed—"if the United States wants to come back on that... we're always ready," Carney said—the immediate Canadian strategy will now focus on the high-stakes CUSMA negotiations set to define North American trade for years to come.
