Trade talks in two acts: Canada-U.S. poised to negotiate in stages

Alexander Panetta · CBC News

· Posted: May 09, 2025 4:59 PM EDT | Last Updated: 4 minutes ago

All signs point to Canada and the United States holding trade negotiations in two separate phases — with some now on immediate irritants, and the rest next year.

The process is still taking shape. But the two-step idea is emerging in comments following this week's meeting between Prime Minister Mark Carney and U.S. President Donald Trump.

The first phase? A fast-track push to ease tensions over tariffs and stabilize trade ties, anchored in the broader Canada-U.S. security relationship.

This lets both sides sidestep the thornier formal review of the Canada-U.S.-Mexico Agreement (CUSMA), which isn't legally scheduled to start until next year.

Based on Trump's own comments, it's not even clear he's wedded to preserving CUSMA as a three-country pact, let alone having assessed the technical feasibility of speeding up its negotiating timeline.

Canada's ambassador to the U.S. told CBC News that the countries aren't actually looking at the broader North American pact right away.

"Whether there's a possibility of that [CUSMA review] being advanced is not really under discussion right now," Kirsten Hillman said on Friday. 

"Right now we're focusing on the meeting, and the agreement, between the prime minister and the president, which is to have some bilateral discussions to come up with an arrangement that works for both countries.

"To focus on a Canada-U.S. arrangement."

She's been in contact with U.S. Trade Representative Jamieson Greer, while Trade Minister Dominic LeBlanc has been speaking with U.S. Commerce Secretary Howard Lutnick.

Comments from the U.S. side reinforce the idea that Washington sees bilateral deals with individual countries as a greater priority than multi-country agreements.

"I don't even know if we're going to be dealing with USMCA," Trump said during his Oval Office meeting with Carney, using the U.S. acronym for the North American trade pact. 

"We're dealing more with concepts right now."

Look to the U.K. talks

So what might such concepts look like? The U.S. ambassador to Canada pointed as a template to this week's U.S.-United Kingdom agreement, an informal arrangement that's not embedded in law.

Some of the main topics of that negotiations match those expected to be on the table in Canada-U.S. talks, Pete Hoekstra told the National Post.

In an interview with the Post, he mentioned the elimination of tariffs on U.K. steel and aluminum, which Canada will certainly seek. He then mentioned U.S. attempts to eliminate the U.K.'s digital-services tax — still unresolved.

He added, "All I know is they're covering the same issues."

As for why the U.K. has already concluded these negotiations but Canada hasn't, Hoekstra called it a priority, but said Canada's election slowed things down.

The countries have since begun mapping out the basic architecture of how these negotiations will unfold. 

"Now begins the framework," Hoekstra said.

The security element Carney raised

It was Carney's idea to tie trade to a broader Canada-U.S. conversation about security. The main goal: To protect Canadian goods from tariffs on national-security grounds.

What might that look like? 

Take the example of Canada's No. 1 most lucrative export: oil. Former Conservative leader Erin O'Toole has suggested guaranteeing the U.S. certain volumes per year at discount prices — in other words, formalizing what already happens.

As for Canada's No. 2 export, autos, Carney made a cryptic comment while in Washington. He alluded to Canada being part of the solution to Trump's concern about Asian parts imports.

One auto-industry official, Flavio Volpe, said Canada could seek relief from tariffs by taking several steps to assuage Trump on national security grounds.

They could include preferred-customer agreements with the U.S. for coveted commodities — critical minerals, uranium, and oil and gas. 

It could resemble agreements Canada signed with Germany and its auto companies three years ago, said Volpe, head of Canada's national auto-parts makers' association. Canada, he said, could also guarantee to keep certain Chinese parts out of North American supply chains.

These are the sorts of conversations about to begin. 

"You could do that separate from CUSMA."